<PAGE>
PIMCO Funds Prospectus
---------------------------------------------------------
Multi-Manager PIMCO Equity Advisors
Series
Equity Income Fund Select Growth Fund
November 1, 2000
Value Fund Target Fund
Share Classes
Renaissance Fund Opportunity Fund
Ins Institutional Growth & Income Fund Innovation Fund
Adm Administrative
Growth Fund Global Innovation Fun
--------------------------------------------------------------------------------
PIMCO/ALLIANZ INTERNATIONAL ADVISORS
Allianz Select International Fund
--------------------------------------------------------------------------------
CADENCE CAPITAL MANAGEMENT
Mega-Cap Fund Mid-Cap Fund
Capital Appreciation Fund Micro-Cap Fund
--------------------------------------------------------------------------------
NFJ INVESTMENT GROUP
Small-Cap Value Fund
--------------------------------------------------------------------------------
PARAMETRIC PORTFOLIO ASSOCIATES
Enhanced Equity Fund Tax-Efficient Structured
Tax-Efficient Equity Fund
Structured Emerging Markets Fund Emerging Markets Fund
--------------------------------------------------------------------------------
BLAIRLOGIE CAPITAL MANAGEMENT
International Fund
This cover is not part of the Prospectus.
<PAGE>
PIMCO Funds Prospectus
PIMCO This Prospectus describes 21 mutual funds offered by PIMCO Funds:
Funds: Multi-Manager Series. The Funds provide access to the professional
Multi- investment advisory services offered by PIMCO Advisors L.P. and
Manager its investment management affiliates. As of September 30, 2000,
Series PIMCO Advisors and its affiliates managed approximately
$272 billion in assets. PIMCO Advisors' institutional heritage is
reflected in the PIMCO Funds offered in this Prospectus.
November
1, 2000
This Prospectus explains what you should know about the Funds
before you invest. Please read it carefully.
Share
Classes
Institutional
and
Administrative
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Fund Summaries
Equity Income Fund............................................. 5
Value Fund..................................................... 7
Renaissance Fund............................................... 9
Growth & Income Fund........................................... 11
Growth Fund.................................................... 13
Select Growth Fund............................................. 15
Target Fund.................................................... 17
Opportunity Fund............................................... 19
Innovation Fund................................................ 21
Global Innovation Fund......................................... 23
Allianz Select International Fund.............................. 25
Mega-Cap Fund.................................................. 27
Capital Appreciation Fund...................................... 29
Mid-Cap Fund................................................... 31
Micro-Cap Fund................................................. 33
Small-Cap Value Fund........................................... 35
Enhanced Equity Fund........................................... 37
Tax-Efficient Equity Fund...................................... 39
Structured Emerging Markets Fund............................... 41
Tax-Efficient Structured Emerging Markets Fund................. 44
International Fund............................................. 47
Summary of Principal Risks....................................... 49
Management of the Funds.......................................... 53
Investment Options -- Institutional Class and Administrative
Class Shares ................................................... 59
Purchases, Redemptions and Exchanges............................. 60
How Fund Shares Are Priced....................................... 65
Fund Distributions............................................... 66
Tax Consequences................................................. 67
Characteristics and Risks of Securities and Investment
Techniques...................................................... 68
Financial Highlights............................................. 79
</TABLE>
Prospectus
2
<PAGE>
Summary Information
The table below lists the investment objectives and certain investment
characteristics of the Funds. Other important characteristics are described
in the individual Fund Summaries beginning on page 5.
<TABLE>
<CAPTION>
Approximate
Number of
Sub-Adviser Fund Investment Objective Main Investments Holdings
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
PIMCO Equity Equity Income Current income as a Income producing common stocks of 40-50
Advisors primary objective; long- companies with market capitalizations
term growth of capital of more than $2 billion
is a secondary objective
---------------------------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of companies with market 40
capital and income capitalizations of more than $5
billion and below-average valuations
whose business fundamentals are
expected to improve
---------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of Common stocks of companies with below- 50-80
capital and income average valuations whose business
fundamentals are expected to improve
---------------------------------------------------------------------------------------------------------
Growth & Income Long-term growth of Common stocks of companies with market 40-60
capital; current income capitalizations of at least $1 billion
is a secondary objective
---------------------------------------------------------------------------------------------------------
Growth Long-term growth of Common stocks of companies with market 35-40
capital; income is an capitalizations of at least $5 billion
incidental consideration
---------------------------------------------------------------------------------------------------------
Select Growth Long-term growth of Common stocks of companies with market 15-25
capital; income is an capitalizations of at least $10
incidental consideration billion
---------------------------------------------------------------------------------------------------------
Target Capital appreciation; no Common stocks of companies with market 40-60
consideration is given capitalizations of between $1 billion
to income and $10 billion
---------------------------------------------------------------------------------------------------------
Opportunity Capital appreciation; no Common stocks of companies with market 60-100
consideration is given capitalizations of between $100
to income million and $2 billion
---------------------------------------------------------------------------------------------------------
Innovation Capital appreciation; no Common stocks of technology-related 40
consideration is given companies with market capitalizations
to income of more than $200 million
---------------------------------------------------------------------------------------------------------
Global Innovation Capital appreciation; no Common stocks of U.S. and non-U.S. 30-60
consideration is given technology-related companies with
to income market capitalizations of more than
$200 million
---------------------------------------------------------------------------------------------------------------------
PIMCO/Allianz Select International Capital appreciation Common stocks of companies located 30-60
International outside of the United States with
Advisors LLC market capitalizations of more than $1
billion
---------------------------------------------------------------------------------------------------------------------
Cadence Capital Mega-Cap Long-term growth of Common stocks of companies with very 40-60
Management capital large market capitalizations that have
improving fundamentals and whose stock
is reasonably valued by the market
---------------------------------------------------------------------------------------------------------
Capital Appreciation Growth of capital Common stocks of companies with market 60-100
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
---------------------------------------------------------------------------------------------------------
Micro-Cap Long-term growth of Common stocks of companies with market 60-100
capital capitalizations of less than $250
million that have improving
fundamentals and whose stock is
reasonably valued by the market
---------------------------------------------------------------------------------------------------------
</TABLE>
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
<TABLE>
<CAPTION>
Approximate
Number of
Sub-Adviser Fund Investment Objective Main Investments Holdings
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Investment Group Small-Cap Long-term growth of Common stocks of companies with market 100
Value capital and income capitalizations of between $100
million and $1.5 billion and below-
average price-to-earnings ratios
relative to the market and their
industry groups
-----------------------------------------------------------------------------------------------------------------
Parametric Portfolio Enhanced A total return which Common stocks represented in the S&P 100-200
Associates Equity equals or exceeds the 500 Index with market capitalizations
total return performance of more than $5 billion
of an index (currently
the S&P 500 Index) that
represents the
performance of a
reasonably broad
spectrum of common
stocks that are publicly
traded in the U.S.
-----------------------------------------------------------------------------------------------------
Tax-Efficient Maximum after-tax growth A broadly diversified portfolio of at More
Equity of capital least 200 common stocks of companies than
represented in the S&P 500 Index with 200
market capitalizations of more than $5
billion
-----------------------------------------------------------------------------------------------------
Structured Long-term growth of Common stocks of companies located in, More
Emerging capital or whose principal business operations than
Markets are based in, emerging markets 300
-----------------------------------------------------------------------------------------------------
Tax-Efficient Long-term growth of Common stocks of companies located in, More
Structured capital; the Fund also or whose principal business operations than
Emerging seeks to achieve are based in, emerging markets 300
Markets superior after-tax
returns for its
shareholders by using a
variety of tax-efficient
management strategies
-----------------------------------------------------------------------------------------------------------------
Blairlogie Capital International Capital appreciation Common stocks of foreign (non-U.S.) 200-250
Management through investment in an issuers (developed and emerging
international portfolio; markets) with market capitalizations
income is an incidental of more than $500 million
consideration
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Fund
Descriptions,
Performance
and Fees
The Funds provide a broad range of investment choices. The
following Fund Summaries identify each Fund's investment
objective, principal investments and strategies, principal risks,
performance information and fees and expenses. A more detailed
"Summary of Principal Risks" describing principal risks of
investing in the Funds begins after the Fund Summaries.
It is possible to lose money on investments in the Funds. The
fact that a Fund had good performance in the past (for example,
during the year ended 1999) is no assurance that the value of the
Fund's investments will not decline in the future or appreciate at
a slower rate. An investment in a Fund is not a deposit of a bank
and is not insured or guaranteed by the Federal Deposit Insurance
Corporation or any other government agency.
Prospectus 4
<PAGE>
PIMCO Equity Income Fund
Ticker Symbols:
PEIIX (Inst. Class)
PINAX (Admin. Class)
-------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Income producing Capitalization
and Seeks current common stocks with Range
Strategies income as a potential for More than $2
primary capital billion
objective; appreciation
long-term Dividend Frequency
growth of Approximate Number Quarterly
capital is a of Holdings
secondary 40-50
objective
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 to a limited degree 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, except that it may invest without limit in 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:
<TABLE>
<S> <C> <C>
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency Risk . Management Risk
. Value Securities Risk . Interest Rate 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 and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(11/30/94), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. 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.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Equity Income Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 -
9/30/00 7.28%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (2nd Qtr.
'99) 16.06%
--------------------
Lowest (3rd Qtr.
'98) -10.93%
[GRAPH]
1992 14.75%
1993 8.47%
1994 -1.61%
1995 33.47%
1996 21.48%
1997 31.38%
1998 8.37%
1999 -1.92%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
----------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class -1.92% 17.75% 14.25%
----------------------------------------------------------------------
Administrative Class -2.22% 17.47% 13.96%
----------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.75%
----------------------------------------------------------------------
Lipper Equity Income Funds Average(/2/) 3.62% 17.60% 14.24%
-------------------------------------------------------------------
</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 Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively high current income and
growth of income through investing 65% or more of their
portfolios in dividend-paying equities. It does not take into
account sales charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.27% 0.72%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.27 0.97
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class and 0.02% in other expenses attributable to that
class during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
Institutional $74 $230 $401 $ 894
---------------------------------------------------------------------
Administrative 99 309 536 1,190
---------------------------------------------------------------------
</TABLE>
Prospectus 6
<PAGE>
PIMCO Value Fund
Ticker Symbols:
PDLIX (Inst. Class)
PVLAX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Undervalued Capitalization Range
and growth of capital larger More than $5 billion
Strategies and income capitalization
stocks with
improving
business
fundamentals Dividend Frequency
At least annually
Approximate Number
of Holdings
40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of more than $5 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 to a limited degree 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, except that it may invest without limit in 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 Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency Risk . Management
. 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. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(8/21/97), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. 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 Value Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 -
9/30/00 13.15%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (2nd Qtr.
'99) 17.92%
--------------------
Lowest (3rd Qtr.
'98) -13.23%
[GRAPH]
1992 13.15%
1993 16.41%
1994 -4.07%
1995 38.91%
1996 20.34%
1997 26.21%
1998 10.17%
1999 4.30%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/30/91)(/3/)
-------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 4.30% 19.37% 15.11%
-------------------------------------------------------------------------
Administrative Class 3.94% 19.05% 14.81%
-------------------------------------------------------------------------
Russell 1000 Value Index(/1/) 7.34% 23.08% 17.85%
-------------------------------------------------------------------------
Lipper Multi-Cap Value Funds Average(/2/) 6.69% 18.32% 14.24%
-------------------------------------------------------------------------
</TABLE>
(1) The Russell 1000 Value Index is an unmanaged index that
measures the performance of companies in the Russell 1000
Index considered to have less than average growth
orientation. 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 the Fund's comparative index because PIMCO
Advisors believes that the Russell 1000 Value Index is more
representative of the Fund's investment strategies. For
periods ended December 31, 1999, the 1 Year, 5 Year and Fund
Inception average total returns of the S&P 500 Index were
21.04%, 28.56% and 19.70%, respectively.
(2) The Lipper Multi-Cap Value Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges, without concentrating in any one market
capitalization range over an extended period of time. It does
not take into account sales charges.
(3) The Fund began operations on 12/30/91. Index comparisons begin
on 12/31/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.25% 0.70%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.26 0.96
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
each class and 0.01% in other expenses attributable to
Administrative Class shares during the most recent fiscal
year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION> Share Class
Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 98 306 531 1,178
---------------------------------------------------------------------
</TABLE>
Prospectus 8
<PAGE>
PIMCO Renaissance Fund
Ticker Symbols:
PRNIX (Inst. Class)
PRAAX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Undervalued Capitalization Range
and growth of capital stocks with All capitalizations
Strategies and income improving
business
fundamentals
Dividend Frequency
Approximate Number At least annually
of Holdings
50-80
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with below-average valuations whose business fundamentals are
expected to improve. 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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency Risk . Management
. Value Securities Risk Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Institutional Class shares
(12/30/97) and Administrative Class shares (8/31/98), performance
information shown in the bar chart (including the information to
its right) and in the Average Annual Total Returns table for those
classes is based on the performance of the Fund's Class C shares,
which are offered in a different prospectus. The prior Class C
performance has been adjusted to reflect the actual fees and
expenses paid by Institutional Class and Administrative Class
shares, including no sales charges (loads) and lower distribution
and/or service (12b-1) fees (if any) and administrative fees.
Prior to May 7, 1999, the Fund had a different sub-adviser and
would not necessarily have achieved the performance results shown
on the next page under its current investment management
arrangements. Past performance is no guarantee of future results.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Renaissance Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
18.74%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'98) 18.51%
--------------------
Lowest (3rd Qtr.
'98) -16.52%
[GRAPH]
1990 -14.47%
1991 34.75%
1992 9.02%
1993 22.62%
1994 -3.95%
1995 29.06%
1996 25.82%
1997 36.42%
1998 11.83%
1999 19.00%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (4/18/88)(/3/)
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional Class 9.80% 22.16% 14.94% 14.39%
----------------------------------------------------------------------------------
Administrative Class 9.77% 21.91% 14.68% 14.13%
----------------------------------------------------------------------------------
Russell Mid-Cap Value Index(/1/) - 0.10% 18.00% 13.81% 14.53%
----------------------------------------------------------------------------------
Lipper Multi-Cap Value Funds Average(/2/) 6.69% 18.32% 13.11% 13.67%
----------------------------------------------------------------------------------
</TABLE>
(1) The Russell Mid-Cap Value Index is an unmanaged index that
measures the performance of medium capitalization 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 Mid-Cap Value Index
replaced the Russell 1000 Value Index (an unmanaged index
that measures the performance of companies in the Russell
1000 Index considered to have less than average growth
orientation) and 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 Mid-Cap 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 Russell 1000 Value Index
were 7.34%, 23.08%, 15.60% and 15.38%, respectively, and of
the S&P 500 Index were 21.04%, 28.56%, 18.21% and 19.06%,
respectively.
(2) The Lipper Multi-Cap Value Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges without concentrating in any one market
capitalization range over an extended period of time. It does
not take into account sales charges
(3) The Fund began operations on 4/18/88. Index comparisons
begin on 4/30/88.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.60% None 0.25% 0.85%
--------------------------------------------------------------------
Administrative 0.60 0.25% 0.25 1.10
--------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 87 $271 $471 $1,049
--------------------------------------------------------------------------------------
Administrative 112 350 606 1,340
--------------------------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
PIMCO Growth & Income Fund
Ticker Symbols:
PMEIX (Inst. Class)
N/A (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Medium and large Capitalization
and Seeks long-term capitalization Range
Strategies growth of common stocks At least $1 billion
capital;
current income Approximate Number Dividend Frequency
is a secondary of Holdings At least annually
objective 40-60
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 at least $1 billion at the time of
investment. The Fund may invest up to 75% of its assets in
securities selected for their growth potential. The Fund will
normally invest at least 25% of its assets in securities selected
for their income potential, including dividend-paying common
stocks, preferred stocks, corporate bonds, convertible securities
and real estate investment trusts (REITs).
When selecting securities for the Fund's "growth" segment, 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's portfolio managers may choose to
sell a stock in the "growth" segment when they believe that its
earnings will be disappointing or that market sentiment on the
company will turn negative. The portfolio managers will also
consider selling a stock if the company does not meet the
managers' estimates on revenues and/or earnings, or if an
alternative investment is deemed to be more attractive.
When selecting securities for the Fund's "income" segment, the
portfolio managers seek to identify companies with strong
operating fundamentals that offer potential for capital
appreciation and that also have a dividend yield in excess of the
yield on the S&P 500 Index. The portfolio managers may replace an
"income" security when another security with a similar risk-to-
reward profile offers either better potential for capital
appreciation or a higher yield than the Fund's current holding. To
achieve its income objective, the Fund may also invest to a
limited degree in preferred stocks, convertible securities and
REITs. The Fund may invest up to 10% of its assets in corporate
bonds, which will typically consist of investment grade securities
of varying maturities but may also include high yield securities
("junk bonds") rated at least B by Standard & Poor's Rating
Services or Moody's Investors Service, Inc. or, if unrated,
determined by the Adviser to be of comparable quality.
The Fund may invest up to 15% of its assets in foreign
securities, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future. 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 . Liquidity Risk . Interest Rate
. Issuer Risk . Foreign Investment Risk Risk
. Value Securities Risk . Currency Risk . High Yield Risk
. Growth Securities . Focused Investment Risk . Credit Risk
Risk . Technology Related Risk . Management Risk
. Smaller Company Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class Shares.
During the periods shown, Administrative Class shares were
outstanding only from 8/21/97 (the inception date of
Administrative Class shares) to 5/27/99 (the date on which all
Administrative Class shares then outstanding were redeemed). For
periods prior to 8/21/97 and after 5/27/99, performance
information shown in the Average Annual Total Returns table for
Administrative Class shares is based on the performance of the
Fund's Institutional Class shares, adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. The performance information on the
next page for periods prior to August 1, 2000 reflects the Fund's
advisory fee rate in effect prior to that date (0.63% per annum),
which is higher than the current rate (0.60% per annum). 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 August 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.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Growth & Income Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00-
9/30/00 23.58%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99 40.12%)
--------------------
Lowest (3rd Qtr.
'98 -11.53%)
[GRAPH]
1995 31.72%
1996 17.31%
1997 16.22%
1998 29.89%
1999 51.81%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/28/94)(/3/)
------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 51.81% 28.77% 28.72%
------------------------------------------------------------------------
Administrative Class 51.32% 28.48% 28.41%
------------------------------------------------------------------------
S&P Mid-Cap 400 Index(/1/) 14.73% 23.05% 23.05%
------------------------------------------------------------------------
Lipper Large-Cap Core Funds Average(/2/) 22.77% 25.49% 25.49%
------------------------------------------------------------------------
</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 Large-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index.
It does not take into account sales charges. The Lipper Large-
Cap Core Funds Average replaced the Lipper Mid-Cap Funds
Average (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) because PIMCO Advisors believes the
Large-Cap Core Funds Average is more representative of the
Fund's investment strategies. For periods ended December 31,
1999, the 1 Year, 5 Years and Fund Inception average annual
total returns of the Lipper Mid-Cap Fund Average were 39.38%,
23.07% and 23.07%, respectively.
(3) The Fund began operations on 12/28/94. Index comparisons begin
on 12/31/94.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees(/1/) (12b-1) Fees Expenses(/2/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.60% None 0.40% 1.00%
---------------------------------------------------------------------
Administrative 0.60 0.25% 0.40 1.25
---------------------------------------------------------------------
(1) On August 1, 2000, the Fund's advisory fee rate decreased by
0.03%, to 0.60% per annum.
(2) Other Expenses reflects a 0.25% Administrative Fee paid by
each class and 0.15% in other expenses attributable to
Institutional Class shares during the most recent fiscal
year, and estimated to be attributable to Administrative
Class shares during the current fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $102 $318 $552 $1,225
---------------------------------------------------------------------
Administrative 127 397 686 1,511
---------------------------------------------------------------------
</TABLE>
Prospectus 12
<PAGE>
PIMCO Growth Fund
Ticker Symbols:
PGFIX (Inst. Class)
vv PGFAX (Admin. Class)
------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Larger capitalization Capitalization Range
and Seeks long-term common stocks At least $5 billion
Strategies growth of
capital; income Approximate Number Dividend Frequency
is an of Holdings At least annually
incidental 35-40
consideration
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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future.
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment . Focused Investment
. Issuer Risk Risk Risk
. Growth Securities . Currency Risk . Credit Risk
Risk . Technology Related . Management Risk
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Class C shares, which are offered in a different
prospectus. This is because the Fund has not offered Institutional
Class or Administrative Class shares for a full calendar year.
Although Class C, Institutional Class and Administrative Class
shares would have similar annual returns (because all the Fund's
shares represent interests in the same portfolio of securities),
Class C performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and expenses paid by Class C shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class C shares in the Average Annual Total Returns table
reflect the impact of sales charges. For periods prior to the
inception of Institutional Class and Administrative Class shares
(3/31/99), the Average Annual Total Returns table also shows
estimated historical performance for Institutional Class and
Administrative Class shares based on the performance of the Fund's
Class C shares. The prior Class C performance has been adjusted to
reflect that there are no sales charges and lower distribution
and/or service (12b-1) fees (if any), administrative fees and
other expenses paid by Institutional Class and Administrative
Class shares. 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 Growth Fund (continued)
Calendar Year Total Returns -- Class C
More Recent Return
Information
--------------------
1/1/00 -
9/30/00________4.43%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99) 36.21%
--------------------
Lowest (3rd Qtr.
'90) -13.14%
[GRAPH]
1990 0.29%
1991 41.88%
1992 2.08%
1993 9.32%
1994 -0.75%
1995 27.47%
1996 17.52%
1997 21.84%
1998 38.90%
1999 39.83%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
<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%
----------------------------------------------------------------------------------
Institutional Class 40.87% 30.17% 20.08% 20.58%
----------------------------------------------------------------------------------
Administrative Class 40.54% 29.85% 19.79% 20.29%
----------------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 18.21% 18.60%
----------------------------------------------------------------------------------
Lipper Large-Cap Growth Funds Average(/2/) 40.54% 29.41% 18.88% 17.74%
----------------------------------------------------------------------------------
</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 Large-Cap Growth Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. It
does not take into account sales charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin
on 2/29/84.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<C> <C>
<C> Distribution <C> Total Annual
<S> Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
Institutional 0.50% None 0.27% 0.77%
---------------------------------------------------------------------
Administrative 0.50 0.25% 0.27 1.02
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class and 0.02% in other expenses attributable to that
class during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 79 $246 $428 $ 954
---------------------------------------------------------------------
Administrative 104 325 563 1,248
---------------------------------------------------------------------
</TABLE>
Prospectus 14
<PAGE>
PIMCO Select Growth Fund
Ticker Symbols:
PCFIX (Inst. Class)
PCEAX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment ObjectiveFund Focus Approximate
Investments Seeks long-term Larger Capitalization Range
and growth of capitalization At least $10 billion
Strategies capital; income common stocks
is an incidental Dividend Frequency
consideration Approximate Number At least annually
of Holdings
15-25
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 also invest to a limited degree in other kinds of
equity securities, including preferred stocks and convertible
securities. The Fund may invest up to 25% of its assets in foreign
securities, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future. 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> <C>
.Market Risk .Focused Investment Risk .Currency Risk
.Issuer Risk .Growth Securities Risk .Credit Risk
.Technology Related Risk .Foreign Investment 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. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(5/31/95), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. The performance information on the
next page for periods prior to April 1, 2000 reflects the Fund's
advisory fee rate in effect prior to that date (0.57% per annum);
these results would have been lower had the current advisory fee
rate (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.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Select Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
16.44%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'98 24.90%)
--------------------
Lowest (3rd Qtr.
'98 -11.38%)
[GRAPH]
1995 27.96%
1996 17.95%
1997 25.32%
1998 41.06%
1999 24.27%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
Fund Inception
1 Year 5 Years (12/28/94)(/3/)
--------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 24.27% 27.09% 27.06%
--------------------------------------------------------------------------
Administrative Class 23.75% 26.69% 26.67%
--------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 28.56%
--------------------------------------------------------------------------
Lipper Large-Cap Growth Funds Average(/2/) 40.54% 29.41 % 29.41%
--------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Large-Cap Growth Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. It
does not take into account sales charges.
(3) The Fund began operations on 12/28/94. Index comparisons begin
on 12/31/94.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees(/1/) (12b-1) Fees Expenses(/2/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.60% None 0.37% 0.97%
---------------------------------------------------------------------
Administrative 0.60 0.25% 0.36 1.21
---------------------------------------------------------------------
(1) On April 1, 2000, the Fund's advisory fee rate increased by
0.03%, to 0.60% per annum.
(2) Other Expenses reflects a 0.25% Administrative Fee paid by
each class and 0.12% and 0.11% in other expenses attributable
to Institutional Class and Administrative Class shares,
respectively, during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 99 $309 $536 $1,190
---------------------------------------------------------------------
Administrative 123 384 665 1,466
---------------------------------------------------------------------
</TABLE>
Prospectus 16
<PAGE>
PIMCO Target Fund
Ticker Symbols: PFTIX
(Inst. Class)
PTADX (Admin.
Class)
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Principal Investment Objective Fund Focus Approximate
Investments Seeks capital Medium Capitalization Range
and appreciation; no capitalization Between $1 billion
Strategies consideration is common stocks and $10 billion
given to income
Approximate Number Dividend Frequency
of Holdings At least annually
40-60
</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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future.
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>
.Market Risk .Liquidity Risk .Focused Investment
.Issuer Risk .Foreign Investment Risk Risk
.Growth Securities Risk .Currency Risk .Credit Risk
.Smaller Company Risk .Technology Related 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. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Class A shares, which are offered in a different
prospectus. This is because the Fund has not offered Institutional
Class or Administrative Class shares for a full calendar year.
Although Class A, Institutional Class and Administrative Class
shares would have similar annual returns (because all the Fund's
shares represent interests in the same portfolio of securities),
Class A performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and/or expenses paid by Class A shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class A shares in the Average Annual Total Returns table
reflect the impact of sales charges. For periods prior to the
inception of Institutional Class and Administrative Class shares
(3/31/99), the Average Annual Total Returns table also shows
estimated historical performance for those classes based on the
performance of the Fund's Class A shares. The Class A performance
has been adjusted to reflect that there are no sales charges and
lower administrative fees and other expenses paid by Institutional
Class and Administrative Class shares (including no distribution
and/or service (12b-1) fees paid by Institutional Class shares).
Prior to March 6, 1999, Fund had a different sub-adviser and would
not necessarily have achieved the performance results shown on the
next page under its current investment management arrangements.
Past performance is no guarantee of future results.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Target Fund (continued)
Calendar Year Total Returns -- Class A
More Recent Return
Information
--------------------
1/1/00 -
9/30/00 40.50%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99 53.05%)
--------------------
Lowest (3rd Qtr.
'98 -13.15%)
[GRAPH]
1993 -24.52%
1994 3.09%
1995 30.31%
1996 15.68%
1997 15.44%
1998 23.27%
1999 66.25%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/17/92)(/3/)
-----------------------------------------------------------------------
<S> <C> <C> <C>
Class A 57.10% 28.28% 24.13%
-----------------------------------------------------------------------
Institutional Class 66.50% 30.31% 25.66%
-----------------------------------------------------------------------
Administrative Class 66.28% 30.02% 25.37%
-----------------------------------------------------------------------
S&P Mid-Cap 400 Index(/1/) 14.73% 23.05% 17.55%
-----------------------------------------------------------------------
Lipper Multi-Cap Growth Funds Average(/2/) 57.98% 28.51% 20.93%
-----------------------------------------------------------------------
</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 Multi-Cap Growth Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges without concentrating in any one market
capitalization range over an extended period of time. It does
not take into account sales charges.
(3) The Fund began operations on 12/17/92. Index comparisons begin
on 12/31/92.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.55% None 0.26% 0.81%
---------------------------------------------------------------------
Administrative 0.55 0.25% 0.26 1.06
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class and 0.01% in other expenses attributable to that
class during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 83 $259 $450 $1,002
---------------------------------------------------------------------
Administrative 108 337 585 1,294
---------------------------------------------------------------------
</TABLE>
Prospectus 18
<PAGE>
PIMCO Opportunity Fund
Ticker Symbols: POFIX (Inst. Class)
POADX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks capital Smaller Capitalization Range
and appreciation; no capitalization Between $100 million
Strategies consideration is common stocks and $2 billion
given to income
Approximate Number Dividend Frequency
of Holdings 60-100 At least annually
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of between $100 million and
$2 billion at the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify 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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund may invest a substantial
portion of its assets in the securities of smaller capitalization
companies and securities issued in initial public offerings
(IPOs). The Fund has in the past invested a significant portion of
its assets in technology or technology-related companies, although
there is no assurance that it will continue to do so in the
future.
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 . IPO Risk . Technology Related
. Issuer Risk . Liquidity Risk Risk
. Growth Securities Risk . Foreign Investment . Focused Investment
. Smaller Company Risk Risk Risk
. Currency Risk . Credit Risk
. Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Class C shares, which are offered in a different
prospectus. This is because the Fund has not offered Institutional
Class or Administrative Class shares for a full calendar year.
Although Class C, Institutional Class and Administrative Class
shares would have similar annual returns (because all the Fund's
shares represent interests in the same portfolio of securities),
Class C performance would be lower than Institutional Class or
Administrative Class performance because of the sales charges and
higher expenses paid by Class C shares. The returns in the bar
chart and the information to its right do not reflect the impact
of sales charges (loads). If they did, the returns would be lower
than those shown. Unlike the bar chart, performance figures for
Class C shares in the Average Annual Total Returns table reflect
the impact of sales charges. For periods prior to the inception of
Institutional Class and Administrative Class shares (3/31/99), the
Average Annual Total Returns table also shows estimated historical
performance for those classes based on the performance of the
Fund's Class C shares. The Class C performance has been adjusted
to reflect that there are no sales charges and lower distribution
and/or service (12b-1) fees (if any), administrative fees and
other expenses paid by Institutional Class and Administrative
Class shares. 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.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Opportunity Fund (continued)
Calendar Year Total Returns -- Class C
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
5.06%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99) 45.70%
--------------------
Lowest (3rd Qtr.
'98) -25.78%
[GRAPH]
1990 -7.34%
1991 68.08%
1992 28.46%
1993 36.16%
1994 -4.74%
1995 41.43%
1996 11.54%
1997 -4.75%
1998 1.29%
1999 63.99%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
-------------------------------------------------------------------------------
Class C 62.99% 20.09% 20.55% 18.93%
-------------------------------------------------------------------------------
Institutional Class 64.93% 21.34% 21.86% 20.25%
-------------------------------------------------------------------------------
Administrative Class 64.59% 21.04% 21.57% 19.96%
-------------------------------------------------------------------------------
Russell 2000 Index(/1/) 21.25% 16.69% 13.40% 12.49%
-------------------------------------------------------------------------------
Lipper Small-Cap Growth Funds Average(/2/) 61.78% 22.83% 18.12% 15.00%
-------------------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Small-Cap Growth Funds 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 250% of the dollar-weighted median
market capitalization of the S&P Small-Cap 600 Index. It does
not take into account sales charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin
on 2/29/84.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)
None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
-----------------------------------------------------------------
Institutional 0.65% None 0.26% 0.91%
-----------------------------------------------------------------
Administrative 0.65 0.25% 0.26 1.16
-----------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class and 0.01% in other expenses attributable to that
class during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and that the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 93 $290 $504 $1,120
-----------------------------------------------------------------
Administrative 118 368 638 1,409
-----------------------------------------------------------------
</TABLE>
Prospectus 20
<PAGE>
PIMCO Innovation Fund
Ticker Symbols:
PIFIX (Inst. Class)
PIADX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks capital Common stocks of Capitalization Range
and appreciation; no technology- More than $200
Strategies consideration is related companies million
given to income
Approximate Number Dividend Frequency
of Holdings At least annually
40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
which utilize 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 a
substantial portion of its assets in the securities of smaller
capitalization companies. The Fund may invest up to 15% of its
assets in foreign securities, except that it may invest without
limit in 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
.Focused Investment Risk .Foreign Investment Risk .Management Risk
.Growth Securities Risk .Technology Related Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Class A shares, which are offered in a different
prospectus. This is because the Fund has not offered Institutional
Class or Administrative Class shares for a full calendar year.
Although Class A, Institutional Class and Administrative Class
shares would have similar returns (because all the Fund's shares
represent interests in the same portfolio of securities), Class A
performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and/or expenses paid by Class A shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class A shares in the Average Annual Total Returns table
reflect the impact of sales charges. For periods prior to the
inception of Institutional Class shares (3/5/99) and for all
periods shown for Administrative Class shares (which were not
offered during those periods), the Average Annual Total Returns
table also shows estimated historical performance for those
classes based on the performance of the Fund's Class A shares. The
Class A performance has been adjusted to reflect that there are no
sales charges and lower administrative fees and other expenses
paid by Institutional Class and Administrative Class shares
(including no distribution and/or service (12b-1) fees paid by
Institutional Class shares). Prior to March 6, 1999, the Fund had
a different sub-adviser and would not necessarily have achieved
the performance results shown on the next page under its current
investment management arrangements. Past performance is no
guarantee of future results.
21 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Innovation Fund (continued)
Calendar Year Total Returns -- Class A
More Recent Return
Information
--------------------
1/1/00 -
9/30/00 21.31%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99) 80.12%
--------------------
Lowest (1st Qtr.
'97) -12.56%
[GRAPH]
1995 45.33%
1996 23.60%
1997 9.03%
1998 79.41%
1999 139.40%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/22/94)(/3/)
------------------------------------------------------------------------------
<S> <C> <C> <C>
Class A 126.24% 51.38% 51.01%
------------------------------------------------------------------------------
Institutional Class 140.65% 53.74% 53.36%
------------------------------------------------------------------------------
Administrative Class 139.75% 53.33% 52.94%
------------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 28.56%
------------------------------------------------------------------------------
Lipper Science and Technology
Fund Average(/2/)
135.19% 41.03% 41.03%
------------------------------------------------------------------------------
</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 Science and Technology Fund Average is a total
return performance average of funds tracked by Lipper
Analytical Services, Inc. that invest 65% of their assets in
science and technology stocks. It does not take into account
sales charges.
(3) The Fund began operations on 12/22/94. Index comparisons begin
on 12/31/94.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.65% None 0.25% 0.90%
---------------------------------------------------------------------
Administrative 0.65 0.25% 0.25 1.15
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 92 $287 $498 $1,108
---------------------------------------------------------------------
Administrative 117 365 633 1,398
---------------------------------------------------------------------
</TABLE>
Prospectus 22
<PAGE>
PIMCO Global Innovation Fund
Ticker Symbols:
N/A (Inst. Class)
N/A (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks capital Common stocks of Capitalization Range
and appreciation; no U.S. and non-U.S. More than $200 million
Strategies consideration is technology-related
given to income companies Dividend Frequency
At least annually
Approximate Number
of Holdings
30-60
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 may invest a
substantial portion of its assets in the securities of smaller
capitalization companies and securities issued in initial public
offerings (IPOs). 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 invests primarily in
securities traded principally in the securities markets of
developed countries, the Fund has no other prescribed limits on
geographic asset distribution and may invest in any foreign
securities market in the world, including in developing, or
"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:
.Market Risk .Smaller Company Risk .Currency Risk
.Issuer Risk .Liquidity Risk .Focused Investment
.Technology Related .Derivatives Risk Risk
Risk .Foreign Investment .Leveraging Risk
.Growth Securities Risk Risk .Credit Risk
.IPO Risk .Emerging Markets Risk .Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance
Information
The Fund commenced operations in December 1999 and does not yet
have a full calendar year of performance. Thus, no bar chart or
Average Annual Total Returns table is included for the Fund.
23 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 Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating Expense Net Fund
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses Reduction(/2/) Operating Expenses(/2/)
--------------------------------------------------------------------------------------------------------
Institutional 1.00% None 0.47% 1.47% (0.07)% 1.40%
--------------------------------------------------------------------------------------------------------
Administrative 1.00 0.25% 0.47 1.72 (0.07) 1.65
--------------------------------------------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.40% Administrative Fee paid by the
class and 0.07% in organizational expenses ("Organizational
Expenses") attributable to the class during the most recent
fiscal year.
(2) Net Expenses reflect the effect of a contractual agreement by
PIMCO Advisors to waive, reduce or reimburse its
Administrative Fee for each class to the extent Annual Fund
Operating Expenses exceeded, due to the payment of
organizational and certain other expenses, 1.40% for
Institutional Class shares and 1.65% for Administrative Class
shares during the Fund's most recent (initial) fiscal year.
Under the Expense Limitation Agreement, PIMCO Advisors may
recoup these waivers and reimbursements (which do not continue
after the Fund's initial fiscal year) in future periods, not
exceeding three years, provided total expenses, including such
recoupment, do not exceed the annual expense limit.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $142 $443 $764 $1,674
-----------------------------------------------------------------------------------
Administrative 168 520 895 1,948
-----------------------------------------------------------------------------------
</TABLE>
Prospectus 24
<PAGE>
PIMCO Allianz Select International Fund
Ticker Symbols:
N/A (Inst. Class)
N/A (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks capital Common stock of Capitalization Range
and appreciation non-U.S. issuers More than $1 billion
Strategies
Approximate Number Dividend Frequency
of Holdings At least annually
30-60
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in an international portfolio
of common stocks and other equity securities of companies located
outside of the United States. Although the Fund normally invests
in issuers from at least five different countries, it may at times
invest in fewer than five countries, or even a single country. The
Fund typically invests in approximately 30 to 60 stocks. Although
the Fund invests primarily in developed market countries, it may
also invest in developing, or "emerging," markets. The Fund has no
other limits on geographic asset distribution and may invest in
any foreign securities market in the world. The Fund may also
invest in securities of foreign issuers traded on U.S. securities
markets, but will normally not invest in U.S. issuers. The Fund
invests most of its assets in foreign securities which trade in
currencies other than the U.S. dollar and may invest directly in
foreign currencies.
The portfolio managers select securities for the Fund using a
research-driven "bottom-up" approach that seeks to utilize the
Sub-Adviser's global research capabilities to identify companies
with above-average long-term growth prospects and attractive
valuations and that possess a sustainable competitive advantage,
such as superior or innovative products, personnel and
distribution systems. The portfolio manager seeks to select those
stocks with the best long-term performance expectations, using a
broad range of company fundamentals, such as long-term growth
prospects, price-to-earnings ratios and other valuation measures,
dividend and profit growth, balance sheet strength and return on
assets. The portfolio managers sell stocks in order to adjust or
rebalance the Fund's portfolio and to replace companies with
weakening fundamentals.
The Fund may invest a substantial portion of its assets in the
securities of small and medium capitalization companies. The Fund
may utilize foreign currency exchange contracts and derivative
instruments (such as stock index futures contracts), primarily for
portfolio management and hedging purposes. The Fund may to a
limited degree invest in equity securities other than common
stocks (such as equity-linked securities, preferred stocks and
convertible securities) and may invest up to 10% of its assets in
other investment companies. In response to unfavorable market and
other conditions, the Fund may make temporary investments of some
or all of its assets in foreign and domestic fixed income
securities and in equity securities of U.S. issuers. This would be
inconsistent with the Fund's investment objective and principal
strategies.
--------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
.Foreign Investment Risk
.Growth Securities Risk.Focused Investment
.Emerging Market Risk .Value Securities Risk Risk
.Currency Risk .Smaller Company Risk .Leveraging Risk
.Market Risk .Liquidity Risk .Credit Risk
.Issuer Risk .Derivatives Risk .Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
The Fund's Administrative Class shares do not have a performance
history for the time periods shown. Performance information shown
in the Average Annual Total Returns table for Administrative Class
shares is based on the performance of the Fund's Institutional
Class shares, adjusted to reflect the actual distribution and/or
service (12b-1) fees and other expenses paid by Administrative
Class shares. The performance information on the next page for
periods prior to May 8, 2000 reflects the Fund's advisory fee rate
in effect prior to that date (0.85% per annum), which is higher
than the current rate (0.75% per annum). Prior to November 1,
2000, the Fund had different sub-advisers 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 objectives and policies
on November 1, 2000; the performance results shown on the next
page would not necessarily have been achieved had the Fund's
current objectives and policies then been in effect. Past
performance is no guarantee of future results.
25 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Allianz Select International Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 -
9/30/0 -14.71%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99) 47.11%
--------------------
Lowest (3rd Qtr.
'98) -17.79%
[GRAPH]
1998 39.40%
1999 109.71%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (12/31/97)(/3/)
------------------------------------------------------------------------
Institutional Class 109.71% 70.98%
------------------------------------------------------------------------
Administrative Class 109.22% 70.57%
------------------------------------------------------------------------
MSCI EAFE Index(/1/) 27.30% 23.77%
------------------------------------------------------------------------
Lipper International Fund Average(/2/) 40.76% 25.87%
------------------------------------------------------------------------
</TABLE>
(1) The Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) ("MSCI EAFE") Index is a widely
recognized, unmanaged index of issuers in countries of
Europe, Australia and the Far East. It is not possible to
invest directly in the index.
(2) The Lipper International Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest their assets in securities whose
primary trading markets are outside of the United States. It
does not take into account sales charges.
(3) The Fund began operations on 12/31/97. Index comparisons begin
on 12/31/97.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/2/) Expenses
---------------------------------------------------------------------
Institutional 0.75% None 0.50% 1.25%
---------------------------------------------------------------------
Administrative 0.75 0.25% 0.50 1.50
---------------------------------------------------------------------
(1) On May 8, 2000, the Fund's Advisory Fee rate decreased by
0.10%, to 0.75% per annum.
(2) Other Expenses reflects a 0.50% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $127 $397 $686 $1,511
---------------------------------------------------------------------
Administrative 153 474 818 1,791
---------------------------------------------------------------------
</TABLE>
Prospectus
26
<PAGE>
PIMCO Mega-Cap Fund
Ticker Symbols:
N/A (Inst. Class)
N/A (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Very large Capitalization Range
and Seeks long-term capitalization The largest 250
Strategies growth of capital common stocks publicly traded
companies (in terms
Approximate Number of market
of Holdings capitalizations)
40-60
Dividend Frequency
At least annually
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with very large market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers the 250 largest publicly traded
companies (in terms of market capitalization) in the U.S. The team
screens the stocks in this universe for a series of growth
criteria, such as dividend growth, earnings growth, relative
growth of earnings over time (earnings momentum) and the company's
history of meeting earnings targets (earnings surprise), and also
value criteria, such as price-to-earnings, price-to-book and
price-to-cash flow ratios. The team then selects individual stocks
by subjecting the top portion of the stocks in the screened
universe to a rigorous analysis of company factors, such as
strength of management, competitive industry position, and
business prospects, and financial statement data, such as
earnings, cash flows and profitability. The team may interview
company management in making investment decisions. The Fund's
capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team 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 has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future.
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 .Focused Investment
.Issuer Risk .Credit Risk Risk
.Value Securities Risk .Management Risk
.Technology Related Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance
Information
The Fund commenced operations in September 1999 and does not yet
have a full calendar year of performance. Thus, no bar chart or
Average Annual Total Returns table is included for the Fund.
27 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Mega-Cap Fund (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
Distribution Total Annual
Advisory and/or Service Other Fund Operating Expense Net Fund
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses Reduction(/2/) Operating Expenses(/2/)
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Institutional 0.45% None 0.81% 1.26% (0.55)% 0.71%
--------------------------------------------------------------------------------------------------------
Administrative 0.45 0.25% 0.81 1.51 (0.55) 0.96
--------------------------------------------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
each class, 0.55% in organizational expenses ("Organizational
Expenses") attributable to each class during the most recent
fiscal year, and 0.01% in other expenses attributable to
Institutional Class shares during the most recent fiscal year,
and estimated to be attributable to Administrative Class
shares during the current fiscal year.
(2) Net Expenses reflect the effect of a contractual agreement by
PIMCO Advisors to waive, reduce or reimburse its
Administrative Fee for each class to the extent Annual Fund
Operating Expenses exceeded, due to the payment of
organizational and certain other expenses, 0.70% for
Institutional Class shares and 0.95% for Administrative Class
shares during the Fund's most recent (initial) fiscal year.
Under the Expense Limitation Agreement, PIMCO Advisors may
recoup these waivers and reimbursements (which do not continue
after the Fund's initial fiscal year) in future periods, not
exceeding three years, provided total expenses, including such
recoupment, do not exceed the annual expense limit.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $225 $390 $ 858
-----------------------------------------------------------------------------------
Administrative 98 303 524 1,145
-----------------------------------------------------------------------------------
</TABLE>
Prospectus 28
<PAGE>
PIMCO Capital Appreciation Fund
Ticker Symbols:
PAPIX (Inst. Class)
PICAX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Larger Capitalization Range
and Seeks growth of capitalization At least $1 billion
Strategies capital common stocks
Dividend Frequency
Approximate Number At least annually
of Holdings
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with larger market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers the 1,000 largest publicly traded
companies (in terms of market capitalization) in the U.S. The team
screens the stocks in this universe for a series of growth
criteria, such as dividend growth, earnings growth, relative
growth of earnings over time (earnings momentum) and the company's
history of meeting earnings targets (earnings surprise), and also
value criteria, such as price-to-earnings, price-to-book and
price-to-cash flow ratios. The team then selects individual stocks
by subjecting the top 10% of the stocks in the screened universe
to a rigorous analysis of company factors, such as strength of
management, competitive industry position, and business prospects,
and financial statement data, such as earnings, cash flows and
profitability. The team may interview company management in making
investment decisions. The Fund's capitalization criteria applies
at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team looks to sell a
stock when it falls below the median ranking, has negative
earnings surprises, or shows poor performance relative to all
stocks in the Fund's capitalization range or to companies in the
same business sector. A stock may also be sold if its weighting in
the portfolio becomes excessive (normally above 2% of the Fund's
investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Growth Securities Risk .Credit Risk
.Issuer Risk .Focused Investment Risk .Management Risk
.Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(7/31/96), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
29PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Capital Appreciation Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 -
9/30/00 17.70%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99) 23.43%
--------------------
Lowest (3rd Qtr.
'98) -14.16%
[GRAPH]
1992 7.51%
1993 17.70%
1994 -4.26%
1995 37.14%
1996 26.79%
1997 34.22%
1998 17.59%
1999 22.30%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
-----------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 22.30% 27.40% 20.03%
-----------------------------------------------------------------------
Administrative Class 21.92% 27.08% 19.72%
-----------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.75%
-----------------------------------------------------------------------
Lipper Multi-Cap Core Funds Average(/2/) 20.63% 23.01% 17.15%
-----------------------------------------------------------------------
</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 Multi-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges without concentrating in any one market
capitalization range over an extended period of time. It does
not take into account sales charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.26% 0.71%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.26 0.96
---------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by the
class and 0.01% in other expenses attributable to that class
during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $73 $227 $395 $ 883
---------------------------------------------------------------------
Administrative 98 306 531 1,178
---------------------------------------------------------------------
</TABLE>
Prospectus 30
<PAGE>
PIMCO Mid-Cap Fund
Ticker Symbols:
PMGIX (Inst. Class)
PMCGX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Medium Capitalization
and Seeks growth capitalization Range
Strategies of capital common stocks More than $500
million (excluding
Approximate Number the largest 200
of Holdings companies)
60-100
Dividend Frequency
At least annually
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with medium market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations of more than $500 million, but excluding the 200
largest capitalization companies. The team screens the stocks in
this universe for a series of growth criteria, such as dividend
growth, earnings growth, relative growth of earnings over time
(earnings momentum) and the company's history of meeting earnings
targets (earnings surprise), and also value criteria, such as
price-to-earnings, price-to-book and price-to-cash flow ratios.
The team then selects individual stocks by subjecting the top 10%
of the stocks in the screened universe to a rigorous analysis of
company factors, such as strength of management, competitive
industry position, and business prospects, and financial statement
data, such as earnings, cash flows and profitability. The team may
interview company management in making investment decisions. The
Fund's capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team 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 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.Focused Investment Risk
.Issuer Risk .Smaller Company Risk .Credit Risk
.Value Securities Risk .Liquidity Risk .Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(11/30/94), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
31 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Mid-Cap Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 -
9/30/00 28.24%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99) 23.10%
--------------------
Lowest (3rd Qtr.
'98) -14.40%
[GRAPH]
1992 9.18%
1993 15.77%
1994 -2.36%
1995 37.29%
1996 23.36%
1997 34.17%
1998 7.93%
1999 12.98%
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 (3/8/91)(/3/)
--------------------------------------------------------------------
Institutional Class 12.98% 22.61% 17.59%
--------------------------------------------------------------------
Administrative Class 12.67% 22.33% 17.31%
--------------------------------------------------------------------
Russell Mid-Cap Index(/1/) 18.23% 21.85% 17.31%
--------------------------------------------------------------------
Lipper Mid-Cap Core Funds
Average(/2/)
29.16% 21.12% 16.55%
--------------------------------------------------------------------
</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 Funds Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than 300% of the dollar-weighted median market
capitalization of the S&P Mid-Cap 400 Index. It does not take
into account sales charges.
(3) The Fund began operations on 8/26/91. Index comparisons begin
on 8/31/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
Institutional 0.45% None 0.26% 0.71%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.26 0.96
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class and 0.01% in other expenses attributable to that
class during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $73 $227 $395 $ 883
---------------------------------------------------------------------
Administrative 98 306 531 1,178
---------------------------------------------------------------------
</TABLE>
Prospectus 32
<PAGE>
PIMCO Micro-Cap Fund
Ticker Symbols:
PMCIX (Inst. Class)
PMGAX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Very small Capitalization Range
and growth of capital capitalization Less than $250 million
Strategies common stocks
Dividend Frequency
Approximate Number At least annually
of Holdings
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with very small market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations less than $250 million. The team screens the
stocks in this universe for a series of growth criteria, such as
dividend growth, earnings growth, relative growth of earnings over
time (earnings momentum) and the company's history of meeting
earnings targets (earnings surprise), and also value criteria,
such as price-to-earnings, price-to-book and price-to-cash flow
ratios. The team then selects individual stocks by subjecting the
top 10% of the stocks in the screened universe to a rigorous
analysis of company factors, such as strength of management,
competitive industry position, and business prospects, and
financial statement data, such as earnings, cash flows and
profitability. The team may interview company management in making
investment decisions. The Fund's capitalization criteria applies
at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team 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 3% of
the Fund's investments). The Fund may invest a substantial portion
of its assets in the securities of smaller capitalization
companies and securities issued in initial public offerings
(IPOs). The Fund has in the past invested a significant portion of
its assets in technology or technology-related companies, although
there is no assurance that it will continue to do so in the
future.
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 Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
<TABLE>
<S> <C> <C> <C>
.Market Risk .Smaller Company Risk .Focused Investment
.Issuer Risk .IPO Risk .Credit Risk
.Value Securities Risk .Liquidity Risk .Management Risk
.Growth Securities Risk .Technology
Related 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
Information The top of the next page shows summary performance information for
the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(4/1/96), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
33 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Micro-Cap Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
25.53%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (3rd Qtr.
'97) 21.61%
--------------------
Lowest (3rd Qtr.
'98) -20.71%
[GRAPH]
1994 1.02%
1995 36.25%
1996 23.83%
1997 36.69%
1998 -3.88%
1999 5.43%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (6/25/93)(/3/)
-----------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 5.43% 18.50% 16.99%
-----------------------------------------------------------------------
Administrative Class 5.17% 18.22% 16.70%
-----------------------------------------------------------------------
Russell 2000 Index(/1/) 21.25% 16.69% 14.19%
-----------------------------------------------------------------------
Lipper Small-Cap Core Funds Average(/2/) 28.46% 17.40% 13.35%
-----------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalized weighted broad based
index of small capitalization U.S. stocks. It is not possible
to invest directly in the index.
(2) The Lipper Small-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations (on a three-year weighted basis) of less than
250% of the dollar-weighted median market capitalization of the
S&P Small-Cap 600 Index. It does not take into account sales
charges.
(3) The Fund began operations on 6/25/93. Index comparisons begin
on 6/30/93.
--------------------------------------------------------------------------------
Fees and
Expenses These tables describe the fees and expenses you may pay if you buy
of the and hold Institutional Class or Administrative Class shares of the
Fund Fund:
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 1.25% None 0.26% 1.51%
---------------------------------------------------------------------
Administrative 1.25 0.25% 0.26 1.76
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class and 0.01% in other expenses attributable to that
class during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $154 $477 $824 $1,802
---------------------------------------------------------------------
Administrative 179 554 954 2,073
---------------------------------------------------------------------
</TABLE>
Prospectus 34
<PAGE>
PIMCO Small-Cap Value Fund
Ticker Symbols:
PSVIX (Inst. Class)
PVADX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued smaller Capitalization Range
and Seeks long-term capitalization Between $100 million
Strategies growth of capital common stocks and $1.5 billion
and income
Approximate Number Dividend Frequency
of Holdings At least annually
100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of between $100 million and $1.5
billion at the time of investment and below average P/E ratios
relative to the market and their respective industry groups. To
achieve income, the Fund invests a portion of its assets in
income-producing (e.g., dividend-paying) common stocks.
The Fund's initial selection universe consists of approximately
4,500 stocks of companies within the Fund's capitalization range.
The portfolio managers screen this universe to identify
approximately 500 undervalued stocks representing approximately
160 industry groups. This screening process is based on a number
of valuation factors, including P/E ratios (calculated both with
respect to trailing operating earnings and forward earnings
estimates) and price-to-sales, price-to-book value, and price-to-
cash flow ratios. These factors are considered both on a relative
basis (compared to other stocks in the same industry group) and on
an absolute basis (compared to the overall market).
From this narrowed universe, the portfolio managers select
approximately 100 stocks for the Fund, each of which has close to
equal weighting in the portfolio. They select stocks based on a
quantitative analysis of factors including price momentum (based
on changes in stock price relative to changes in overall market
prices), earnings momentum (based on analysts' earnings per share
estimates and revisions to those estimates), relative dividend
yields and trading liquidity. The portfolio is also structured to
have a maximum weighting of no more than 10% in any one industry.
The portfolio managers may replace a stock if its market
capitalization becomes excessive, if its valuation exceeds the
average valuation of stocks represented in the S&P 500 Index, or
when a stock within the same industry group has a considerably
lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully
invested in common stocks (aside from certain cash management
practices). The Fund may temporarily hold up to 10% of its assets
in cash and cash equivalents for defensive purposes in response to
unfavorable market and other conditions. This would be
inconsistent with the Fund's investment objective and principal
strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Smaller Company Risk .Credit Risk
.Issuer Risk .Liquidity Risk .Management Risk
.Value Securities Risk .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 and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(11/1/95), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
35 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Small-Cap Value Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
10.93%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (2nd Qtr.
"99) 16.39%
--------------------
Lowest (3rd Qtr.
"98) -18.61%
[GRAPH]
1992 18.27%
1993 13.39%
1994 -4.07%
1995 24.98%
1996 27.22%
1997 34.47%
1998 -9.16%
1999 -6.40%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (10/1/91)(/3/)
--------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class -6.40% 12.97% 11.98%
--------------------------------------------------------------------------
Administrative Class -6.69% 12.67% 11.69%
--------------------------------------------------------------------------
Russell 2000 Index(/1/) 21.25% 16.69% 14.97%
--------------------------------------------------------------------------
Lipper Small-Cap Value Funds
Average(/2/)
5.87% 13.76% 13.08%
--------------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Small-Cap Value Funds 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 250% of the dollar-weighted
median market capitalization of the S&P Small-Cap 600 Index.
It does not take into account sales charges.
(3) The Fund began operations on 10/1/91. Index comparisons begin
on 9/30/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)
None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.60% None 0.26% 0.86%
---------------------------------------------------------------------
Administrative 0.60 0.25% 0.26 1.11
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class and 0.01% in other expenses attributable to that
class during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 88 $274 $477 $1,061
---------------------------------------------------------------------
Administrative 113 353 612 1,352
---------------------------------------------------------------------
</TABLE>
Prospectus 36
<PAGE>
PIMCO Enhanced Equity Fund
Ticker Symbols:
PEEIX (Inst. Class)
PEQAX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Objective
Investments Fund Focus Approximate
and Seeks to provide A portion of the Capitalization Range
Strategies a total return common stocks More than $5 billion
which equals or represented in
exceeds the the S&P 500 Dividend Frequency
total return Index At least annually
performance of
an index Approximate Number
(currently the of Holdings
S&P 500 Index) 100-200
that represents
the performance
of a reasonably
broad spectrum
of common stocks
that are
publicly traded
in the U.S.
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks represented
in the S&P 500 Index.
In making investment decisions for the Fund, the portfolio
managers first rank the stocks in the S&P 500 Index using a
quantitative model that analyses each stock's exposure to both
growth factors (including company revenues and cash flows,
reported and estimated earnings and earnings estimates revisions)
and value factors (including relative stock price and price-to-
earnings ratios). The rankings give more weight to stocks with
rising earnings expectations where the stock price reflects
reasonable valuation relative to other stocks in the same industry
sector.
Using these rankings, the portfolio managers construct a sector-
neutral portfolio of between 100 to 200 stocks designed to have
above-average total return potential relative to the S&P 500
Index. The portfolio managers also use a computer optimization
model to provide risk-controlled exposure to the S&P 500 Index,
such that the portfolio ordinarily has no greater volatility than
the index and provides diversification across the industry sectors
represented in the index. The portfolio managers attempt to
maintain this balance through frequent and modest restructuring of
the portfolio. Generally, a stock is sold when it drops
significantly in the portfolio managers' rankings or when a
replacement is necessary to maintain the Fund's balance of risk
relative to the S&P 500 Index.
Notwithstanding these strategies, there is no assurance that the
Fund's investment performance will equal or exceed that of the S&P
500 Index.
The Fund may invest in stocks of foreign issuers if included in
the S&P 500. The Fund may change the index upon which it bases its
performance without shareholder approval, although it does not
expect to make such a change under ordinary circumstances.
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Foreign Investment Risk .Leveraging Risk
.Issuer Risk .Currency Risk .Credit Risk
.Value Securities Risk .Focused Investment Risk .Management Risk
.Growth Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(8/21/97), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
37 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Enhanced Equity Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
-2.89%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
"98) 22.48%
--------------------
Lowest (3rd Qtr.
"98) -13.13%
[GRAPH]
1992 6.60%
1993 3.71%
1994 -0.49%
1995 34.42%
1996 21.15%
1997 30.85%
1998 26.51%
1999 17.49%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (2/11/91)(/3/)
----------------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 17.49% 25.93% 17.41%
----------------------------------------------------------------------------
Administrative Class 17.40% 25.64% 17.13%
----------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 20.50%
----------------------------------------------------------------------------
Lipper Large-Cap Core
Funds Average(/2/)
22.77% 25.49% 18.48%
----------------------------------------------------------------------------
</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 Large-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. It
does not take into accout sales charges.
(3) The Fund began operations on 2/11/91. Index comparisons begin
on 1/31/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.26% 0.71%
---------------------------------------------------------------------
Administrative 0.45 0.25% 0.26 0.96
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class and 0.01% in other expenses attributable to that
class during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $73 $227 $395 $ 883
---------------------------------------------------------------------
Administrative 98 306 531 1,178
---------------------------------------------------------------------
</TABLE>
Prospectus 38
<PAGE>
PIMCO Tax-Efficient Equity Fund
Ticker Symbols:
N/A (Inst. Class)
PTXAX (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment ObjectiveFund Focus Approximate
Investments Seeks maximum A portion of the Capitalization Range
and after-tax growth common stocks More than $5 billion
Strategies of capital represented in
the S&P 500 Index
Approximate Number Dividend Frequency
of Holdings
More than 200 At least annually
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 higher 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 Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Growth Securities Risk .Credit Risk
.Issuer Risk .Focused Investment Risk .Management Risk
.Value Securities Risk .Leveraging Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Administrative Class shares.
For periods prior to the inception of Institutional Class shares
(7/2/99) and Administrative Class shares (9/30/98), performance
information shown in the bar chart (including the information to
its right) and in the Average Annual Total Returns table for those
classes is based on the performance of the Fund's Class D shares,
which are offered in a different prospectus. The prior Class D
performance has been adjusted to reflect that there are lower
administrative fees and other expenses paid by Institutional Class
and Administrative Class shares (including no distribution and/or
service (12b-1) fees paid by Institutional Class shares). Past
performance is no guarantee of future results.
39 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Tax-Efficient Equity Fund (continued)
Calendar Year Total Returns -- Administrative Class
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
-2.42%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99) 14.98%
--------------------
Lowest (3rd Qtr.
'99) -7.32%
[GRAPH]
1999 17.66%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year (7/10/98)(/3/)
-----------------------------------------------------------------------------
<S> <C> <C>
Administrative Class 17.66% 15.62%
-----------------------------------------------------------------------------
Institutional Class 18.09% 16.05%
-----------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 20.42%
-----------------------------------------------------------------------------
Lipper Large-Cap Core Funds
Average(/2/)
22.77% 20.65%
-----------------------------------------------------------------------------
</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 Large-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. 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 Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.26% 0.71%
--------------------------------------------------------------------
Administrative 0.45 0.25% 0.26 0.96
--------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class and 0.01% in other expenses attributable to that
class during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distribution, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $73 $227 $395 $ 883
-----------------------------------------------------------------------------------
Administrative 98 306 531 1,178
-----------------------------------------------------------------------------------
</TABLE>
Prospectus 40
<PAGE>
PIMCO Structured Emerging Markets Fund
Ticker Symbols:
PSTIX (Inst. Class)
N/A (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks of Capitalization Range
and Seeks long-term emerging market All capitalizations
Strategies growth of capital issuers
Dividend Frequency
Approximate Number At least annually
of Holdings
More than 300
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
located in, or whose principal business operations are based in,
emerging markets. The Fund is normally exposed to roughly 20
emerging market countries and invests in more than 300 stocks. The
Fund invests most of its assets in foreign securities which trade
primarily in currencies other than the U.S. dollar and may also
invest directly in foreign currencies.
The International Finance Corporation Investable Composite Index
is the primary source for identifying emerging market countries
for the Fund. The portfolio managers may identify other emerging
market countries on the basis of market capitalization and
liquidity, as well their inclusion (or consideration for
inclusion) as emerging market countries in other broad-based
market indexes.
The portfolio managers follow a disciplined and systematic
investment process that emphasizes diversification and fairly
consistent allocation among countries, industries and issuers.
They select countries based on factors such as level of economic
development (with emphasis on GNP per capita and local economic
diversification) and the maturity of equity markets in the country
(with emphasis on freedom of investment flows and development of
legal, regulatory, banking and settlement systems). They assign
equal weight to most countries represented in the portfolio unless
the size of a country's equity market is prohibitive. Countries
with smaller equity markets (i.e., less than $5 billion of market
capitalization) are assigned one-half the weight of countries with
larger equity markets. The portfolio managers divide all issuers
in each eligible country into the following five broad economic
sector groups: financial, industrial, consumer, utilities and
natural resources. The Fund attempts to maintain exposure across
all five sectors in each country. The portfolio managers purchase
and sell individual stocks based on such factors as liquidity,
industry representation, performance relative to industry and
long-term profitability. A stock may also be sold when the
portfolio managers believe its relative weighting in the portfolio
has become excessive.
Aside from certain cash management practices, the Fund intends to
invest substantially all of its assets in common stocks and other
equity and equity-linked securities (including preferred stocks
and convertible securities) and will not make defensive
investments in response to unfavorable market and other
conditions. The Fund may use derivatives.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Foreign .Value Securities .Focused
Investment Risk Risk Investment Risk
.Emerging Markets .Growth .Leveraging Risk
Risk Securities Risk .Credit Risk
.Currency Risk .Smaller Company .Management Risk
.Market Risk Risk
.Issuer Risk .Liquidity Risk
.Derivatives Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
41 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Structured Emerging Markets Fund (continued)
--------------------------------------------------------------------------------
Performance Shown below is summary performance information for the Fund in a
Information bar chart and an Average Annual Total Returns table. The
information provides some indication of the risks of investing in
the Fund by showing changes in its performance from year to year
and by showing how the Fund's average annual returns compare with
the returns of a broad-based securities market index and an index
of similar funds. The bar chart and the information to its right
show performance of the Fund's Institutional Class shares, but the
returns do not reflect the impact of a 1.00% Fund Reimbursement
Fee charged both at the time of purchase and at the time of
redemption. If they did, the returns would be lower than those
shown. The Fund's Administrative Class shares do not have a
performance history. Performance information shown in the Average
Annual Total Returns table for Administrative Class shares is
based on the performance of the Fund's Institutional Class shares,
adjusted to reflect the actual distribution and/or service (12b-1)
fees and other expenses paid by Administrative Class shares.
Unlike the bar chart, performance figures for Institutional Class
and Administrative Class shares in the Average Annual Total
Returns table reflect the impact of Fund Reimbursement Fees. Past
performance is no guarantee of future results.
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
-18.50%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (2nd Qtr.
'99) 31.36%
--------------------
Lowest (3rd Qtr.
'99) -3.62%
[GRAPH]
1999 65.04%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year (6/30/98)(/3/)
----------------------------------------------------------------------
<S> <C> <C>
Institutional Class 62.40% 31.47%
----------------------------------------------------------------------
Administrative Class 62.03% 31.19%
----------------------------------------------------------------------
IFC Investable Composite Index(/1/) 66.79% 33.38%
----------------------------------------------------------------------
Lipper Emerging Markets Fund Average(/2/) 70.21% 29.21%
----------------------------------------------------------------------
</TABLE>
(1) The IFC Investable Composite Index is an unmanaged index
representing the movements of stock prices and total returns
in emerging stock markets taking into consideration foreign
investment restrictions and stock screening for minimum size
and liquidity. It is not possible to invest directly in the
index.
(2) The Lipper Emerging Markets Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that have an investment objective of long-term
capital appreciation through investing at least 65% of their
total assets in "emerging markets" (as determined by a
country's GNP per capita or other economic measures)
securities. It does not take into account sales charges.
(3) The Fund began operations on 6/30/98. Index comparisons begin
on 6/30/98.
Prospectus
42
<PAGE>
PIMCO Structured Emerging Markets Fund (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your None
investment)
Fund Reimbursement Fee (as a percentage of offering or 1.00%*
exchange price or amount redeemed)
* Unless a waiver applies, you will be charged a "Fund
Reimbursement Fee" when you purchase, sell (redeem) or exchange
Institutional Class or Administrative Class shares of the Fund.
The fee will be equal to 1.00% of the net asset value of the
shares purchased, redeemed or exchanged. Fund Reimbursement Fees
are paid to and retained by the Fund and are not sales charges
(loads). See "Purchases, Redemptions and Exchanges--Fund
Reimbursement Fees."
Average Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.79% 1.24%
--------------------------------------------------------------------
Administrative 0.45 0.25% 0.79 1.49
--------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.50% Administrative Fee paid by
the class and 0.29% in other expenses attributable to
Institutional Class shares during the most recent fiscal
year, and estimated to be attributable to Administrative
Class shares during the current fiscal year.
Examples: The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.*
Assuming you redeem your shares at the end of each period.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $328 $600 $ 893 $1,728
-------------------------------------------------------------------------------
Administrative 353 676 1,023 2,001
-------------------------------------------------------------------------------
Assuming you do not redeem your shares.
Share Class Year 1 Year 3 Year 5 Year 10
-------------------------------------------------------------------------------
Institutional $225 $489 $774 $1,585
-------------------------------------------------------------------------------
Administrative 250 566 905 1,862
-------------------------------------------------------------------------------
</TABLE>
* The Examples assume the payment of a 1.00% Fund Reimbursement
Fee both at the time of purchase and at the time of redemption
even though such fees may be waived for certain investors. See
"Purchases, Redemptions and Exchanges--Fund Reimbursement
Fees."
43 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Tax-Efficient Structured Emerging Markets Fund
Ticker Symbols: PEFIX (Inst. Class)
N/A (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment
Investments Objective Fund Focus Approximate
and Seeks long-term Common stocks of Capitalization Range
Strategies growth of emerging market All capitalizations
capital; the Fund issuers
also seeks to
achieve superior
after-tax returns
for its
shareholders by
using a variety
of tax-efficient
management
strategies
Dividend Frequency
Approximate Number of Holdings
At least annually
More than 300
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
located in, or whose principal business operations are based in,
emerging markets. The Fund is normally exposed to roughly 20
emerging market countries and invests in more than 300 stocks. The
Fund invests most of its assets in foreign securities which trade
primarily in currencies other than the U.S. dollar and may also
invest directly in foreign currencies.
The International Finance Corporation Investable Composite Index
is the primary source for identifying emerging market countries
for the Fund. The portfolio managers may identify other emerging
market countries on the basis of market capitalization and
liquidity, as well their inclusion (or consideration for
inclusion) as emerging market countries in other broad-based
market indexes.
The portfolio managers follow a disciplined and systematic
investment process that emphasizes diversification and fairly
consistent allocation among countries, industries and issuers.
They select countries based on factors such as level of economic
development (with emphasis on GNP per capita and local economic
diversification) and the maturity of equity markets in the country
(with emphasis on freedom of investment flows and development of
legal, regulatory, banking and settlement systems). They assign
equal weight to most countries represented in the portfolio unless
the size of a country's equity market is prohibitive. Countries
with smaller equity markets (i.e., less than $5 billion of market
capitalization) are assigned one-half the weight of countries with
larger equity markets. The portfolio managers divide all issuers
in each eligible country into the following five broad economic
sector groups: financial, industrial, consumer, utilities and
natural resources. The Fund attempts to maintain exposure across
all five sectors in each country. The portfolio managers purchase
and sell individual stocks based on such factors as liquidity,
industry representation, performance relative to industry and
long-term profitability. A stock may also be sold when the
portfolio managers believe its relative weighting in the portfolio
has become excessive.
Aside from certain cash management practices, the Fund intends to
invest substantially all of its assets in common stocks and other
equity and equity-linked securities (including preferred stocks
and convertible securities) and will not make defensive
investments in response to unfavorable market and other
conditions. The Fund may use derivatives.
Tax-Efficient Strategies. The portfolio managers utilize a range
of active tax management strategies designed to minimize the
Fund's taxable distributions, including low portfolio turnover and
favoring investments in low-dividend, growth-oriented companies.
The portfolio managers also identify specific shares of stock to
be sold that have the lowest tax cost. When prudent, stocks are
also sold to realize capital losses in order to offset realized
capital gains. In limited circumstances, the Fund may also
distribute appreciated securities to shareholders to meet
redemption requests so as to avoid realizing capital gains.
Despite the use of these tax-efficient strategies, the Fund may
realize gains and shareholders will incur tax liability from time
to time.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Foreign Investment .Value Securities Risk .Focused Investment
Risk .Growth Securities Risk Risk
.Emerging Markets Risk .Smaller Company Risk .Leveraging Risk
.Currency Risk .Liquidity Risk .Credit Risk
.Market Risk .Derivatives Risk .Management Risk
.Issuer Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
Prospectus 44
<PAGE>
PIMCO Tax-Efficient Structured Emerging Markets Fund (continued)
--------------------------------------------------------------------------------
Performance Shown below is summary performance information for the Fund in a
Information bar chart and an Average Annual Total Returns table. The
information provides some indication of the risks of investing in
the Fund by showing changes in its performance from year to year
and by showing how the Fund's average annual returns compare with
the returns of a broad-based securities market index and an index
of similar funds. The bar chart and the information to its right
show performance of the Fund's Institutional Class shares, but the
returns do not reflect the impact of a 1.00% Fund Reimbursement
Fee charged both at the time of purchase and at the time of
redemption. If they did, the returns would be lower than those
shown. The Fund's Administrative Class shares do not have a
performance history. Performance information shown in the Average
Annual Total Returns table for Administrative Class shares is
based on the performance of the Fund's Institutional Class shares,
adjusted to reflect the actual distribution and/or service (12b-1)
fees and other expenses paid by Administrative Class shares.
Unlike the bar chart, performance figures for Institutional Class
and Administrative Class shares in the Average Annual Total
Returns table reflect the impact of Fund Reimbursement Fees. Past
performance is no guarantee of future results.
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
-21.55%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (2nd Qtr.
'99) 32.77%
--------------------
Lowest (3rd Qtr.
'99) -1.06%
[GRAPH]
'99 72.61%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year (6/30/98)(/3/)
----------------------------------------------------------------------
<S> <C> <C>
Institutional Class 69.68% 37.10%
----------------------------------------------------------------------
Administrative Class 69.29% 36.82%
----------------------------------------------------------------------
IFC Investable Composite Index(/1/) 66.79% 33.38%
----------------------------------------------------------------------
Lipper Emerging Markets Fund Average(/2/) 70.21% 29.21%
----------------------------------------------------------------------
</TABLE>
(1) The IFC Investable Composite Index is an unmanaged index
representing the movements of stock prices and total returns
in emerging stock markets taking into consideration foreign
investment restrictions and stock screening for minimum size
and liquidity. It is not possible to invest directly in the
index.
(2) The Lipper Emerging Markets Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that have an investment objective of long-term
capital appreciation through investing at least 65% of their
total assets in "emerging markets" (as determined by a
country's GNP per capita or other economic measures)
securities. It does not take into account sales charges.
(3) The Fund began operations on 6/30/98. Index comparisons begin
on 6/30/98.
PIMCO Funds: Multi-Manager Series
45
<PAGE>
PIMCO Tax-Efficient Structured Emerging Markets Fund (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your None
investment)
Fund Reimbursement Fee (as a percentage of offering or 1.00%*
exchange price or amount redeemed)
* Unless a waiver applies, you will be charged a "Fund
Reimbursement Fee" when you purchase, sell (redeem) or exchange
Institutional Class or Administrative Class shares of the Fund.
The fee will be equal to 1.00% of the net asset value of the
shares purchased, redeemed or exchanged. Fund Reimbursement Fees
are paid to and retained by the Fund and are not sales charges
(loads). See "Purchases, Redemptions and Exchanges--Fund
Reimbursement Fees."
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional 0.45% None 0.55% 1.00%
--------------------------------------------------------------------
Administrative 0.45% 0.25% 0.55 1.25
--------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.50% Administrative Fee paid by
the class and 0.05% in other expenses attributable to that
class during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.*
Assuming you redeem your shares at the end of each period.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $304 $527 $767 $1,459
--------------------------------------------------------------------------------------
Administrative 329 603 898 1,739
--------------------------------------------------------------------------------------
</TABLE>
Assuming you do not redeem you shares.
<TABLE>
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $201 $415 $647 $1,312
--------------------------------------------------------------------------------------
Administrative 226 493 779 1,596
--------------------------------------------------------------------------------------
</TABLE>
* The Examples assume the payment of a 1.00% Fund Reimbursement
Fee both at the time of purchase and at the time of redemption
even though such fees may be waived for certain investors. See
"Purchases, Redemptions and Exchanges--Fund Reimbursement
Fees."
Prospectus
46
<PAGE>
PIMCO International Fund
Ticker Symbols:
N/A (Inst. Class)
N/A (Admin. Class)
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks of Capitalization Range
and Seeks capital foreign More than $500
Strategies appreciation (non-U.S.) million
through issuers
investment in an Dividend Frequency
international Approximate Number At least annually
portfolio; income of Holdings
is an incidental 200-250
consideration
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in an international portfolio
of common stocks, which may or may not pay dividends. The Fund
normally invests in securities traded principally in developed
foreign securities markets, but may also invest up to 30% of its
assets in developing or "emerging" markets. The Fund has no
prescribed limits on geographic asset distribution and may invest
in any foreign securities market in the world. The Fund may also
invest in securities of foreign issuers traded on U.S. securities
markets, but will normally not invest in U.S. issuers. The Fund
invests most of its assets in foreign securities which trade in
currencies other than the U.S. dollar and may invest directly in
foreign currencies.
The portfolio manager uses a "top down" investment approach. He
first determines regional and country weightings for the Fund by
considering such factors as the condition and growth potential of
the various economies and securities markets, currency and
taxation considerations and other financial, social, national and
political factors. The Sub-Adviser's country specialists then
select individual stocks to fill out the desired country
weightings. In selecting stocks, the specialists analyze a broad
range of company fundamentals, such as price-to-earnings, price-
to-book value and price-to-cash flow ratios (value factors),
earnings, dividend and profit growth (growth factors) and balance
sheet strength and return on assets (quality factors). The
portfolio manager sells stocks in order to adjust or rebalance the
Fund's regional and country weightings or to replace companies
with weakening fundamentals.
The Fund may utilize foreign currency exchange contracts and
derivative instruments (such as stock index futures contracts)
primarily for risk management or hedging purposes. The Fund may
also invest in equity securities other than common stocks (such as
preferred stocks and convertible securities) and may invest up to
10% of its assets in other investment companies. In response to
unfavorable market and other conditions, the Fund may make
temporary investments of some or all of its assets in foreign and
domestic fixed income securities and in equity securities of U.S.
issuers. This would be inconsistent with the Fund's investment
objective and principal strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Foreign Investment .Value Securities .Focused Investment
Risk Risk Risk
.Emerging Markets Risk .Growth Securities .Leveraging Risk
.Currency Risk Risk .Credit Risk
.Market Risk .Smaller Companies .Management Risk
.Issuer Risk Risk
.Liquidity Risk
.Derivatives Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Institutional Class and
Administrative Class shares (9/30/98), performance information
shown in the bar chart (including the information to its right)
and in the Average Annual Total Returns table for those classes is
based on the performance of the Fund's Class C shares, which are
offered in a different prospectus. The prior Class C performance
has been adjusted to reflect the actual fees and expenses paid by
Institutional Class and Administrative Class shares, including no
sales charges (loads) and lower distribution and/or service (12b-1
fees) (if any) and administrative fees. The Fund had different
sub-advisers during the periods prior to November 15, 1994 and
would not necessarily have achieved the performance results shown
on the next page under its current investment management
arrangements. Past performance is no guarantee of future results.
PIMCO Funds: Multi-Manager Series
47
<PAGE>
PIMCO International Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
-18.06%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
"99) 21.81%
--------------------
Lowest (3rd Qtr.
"98) -21.91%
[GRAPH]
1990 -14.51%
1991 21.28%
1992 -4.75%
1993 34.98%
1994 -7.11%
1995 7.01%
1996 6.98%
1997 3.03%
1998 9.68%
1999 28.32%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (8/25/86)(/3/)
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional Class 28.32% 10.67% 7.47% 9.07%
-----------------------------------------------------------------
Administrative Class 27.96% 10.32% 7.17% 8.78%
-----------------------------------------------------------------
MSCI EAFE Index(/1/) 27.31% 13.15% 7.34% 10.35%
-----------------------------------------------------------------
Lipper International Fund
Average(/2/) 40.76% 15.13% 10.28% 11.59%
-----------------------------------------------------------------
</TABLE>
(1) The Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) ("MSCI EAFE") Index is a widely
recognized, unmanaged index of issuers in countries of
Europe, Australia and Asia. It is not possible to invest
directly in the index.
(2) The Lipper International Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest their assets in securities whose
primary trading markets are outside of the United States. It
does not take into account sales charges.
(3) The Fund began operations on 8/25/86. Index comparisons begin
on 8/31/86.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
---------------------------------------------------------------------
Institutional 0.55% None 0.58% 1.13%
---------------------------------------------------------------------
Administrative 0.55 0.25% 0.58 1.38
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.50% Administrative Fee paid by the
class and 0.08% in other expenses attributable to that class
during the most recent fiscal year.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
Institutional $115 $359 $622 $1,375
---------------------------------------------------------------------
Administrative 140 437 755 1,657
---------------------------------------------------------------------
</TABLE>
Prospectus 48
<PAGE>
Summary of Principal Risks
The value of your investment in a Fund changes with the values of
that Fund's investments. Many factors can affect those values. The
factors that are most likely to have a material effect on a
particular Fund's portfolio as a whole are called "principal
risks." The principal risks of each Fund are identified in the
Fund Summaries and are summarized in this section. Each Fund may
be subject to additional principal risks and risks other than
those described below because the types of investments made by
each Fund can change over time. Securities and investment
techniques mentioned in this summary and described in greater
detail under "Characteristics and Risks of Securities and
Investment Techniques" appear in bold type. That section and
"Investment Objectives and Policies" in the Statement of
Additional Information also include more information about the
Funds, their investments and the related risks. There is no
guarantee that a Fund will be able to achieve its investment
objective.
Market The market price of securities owned by a Fund may go up or down,
Risk sometimes rapidly or unpredictably. Each of the Funds normally
invests most of its assets in common stocks and/or other equity
securities. A principal risk of investing in each Fund is that the
equity securities in its portfolio will decline in value due to
factors affecting equity securities markets generally or
particular industries represented in those markets. The values of
equity securities may decline due to general market conditions
which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the
general outlook for corporate earnings, changes in interest or
currency rates or adverse investor sentiment generally. They may
also decline due to factors which affect a particular industry or
industries, such as labor shortages or increased production costs
and competitive conditions within an industry. Equity securities
generally have greater price volatility than fixed income
securities.
Issuer The value of a security may also decline for a number of reasons
Risk which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
Value Each Fund may invest in companies that may not be expected to
Securities experience significant earnings growth, but whose securities its
Risk portfolio manager believes are selling at a price lower than their
true value. The Equity Income, Value, Renaissance, Growth &
Income, Allianz Select International, Mega-Cap, Capital
Appreciation, Mid-Cap, Micro-Cap, Small-Cap Value, Enhanced
Equity, Tax-Efficient Equity, Structured Emerging Markets, Tax-
Efficient Structured Emerging Markets and International Funds may
place particular emphasis on value securities. Companies that
issue value securities may have experienced adverse business
developments or may be subject to special risks that have caused
their securities to be out of favor. If a portfolio manager's
assessment of a company's prospects is wrong, or if the market
does not recognize the value of the company, the price of its
securities may decline or may not approach the value that the
portfolio manager anticipates.
Growth Each Fund may invest in equity securities of companies that its
Securities portfolio manager believes will experience relatively rapid
Risk earnings growth. The Growth & Income, Growth, Select Growth,
Target, Opportunity, Innovation, Global Innovation, Allianz Select
International, Mega-Cap, Capital Appreciation, Mid-Cap, Micro-Cap,
Enhanced Equity, Tax-Efficient Equity, Structured Emerging
Markets, Tax-Efficient Structured Emerging Markets and
International Funds may 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
Company
Risk
The general risks associated with equity securities and liquidity
risk are particularly pronounced for securities of companies with
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
49 PIMCO Funds: Multi-Manager Series
<PAGE>
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
Micro-Cap Fund, in particular, and the Innovation, Global
Innovation, Opportunity and Small-Cap Value Funds generally have
substantial exposure to this risk. The Growth & Income, Target,
Allianz Select International and Mid-Cap Funds also have
significant exposure to this risk because they invest substantial
assets in companies with medium-sized market capitalizations,
which are smaller and generally less-seasoned than the largest
companies.
IPO Risk The Funds, particularly the Global Innovation Fund, may purchase
securities in initial public offerings (IPOs). These securities
are subject to many of the same risks as 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. At any particular
time or from time to time a Fund may not be able to invest in
securities issued in IPOs, or invest to the extent desired,
because, for example, only a small portion (if any) of the
securities being offered in an IPO may be made available to the
Fund. In addition, under certain market conditions a relatively
small number of companies may issue securities in IPOs. Similarly,
as the number of Funds to which IPO securities are allocated
increases, the number of securities issued to any one Fund may
decrease. The investment performance of a Fund during periods when
it is unable to invest significantly or at all in IPOs may be
lower than during periods when the Fund is able to do so. In
addition, as a Fund increases in size, the impact of IPOs on the
Fund's performance will generally decrease.
Liquidity All of the Funds are subject to liquidity risk. Liquidity risk
Risk exists when particular investments are difficult to purchase or
sell, possibly preventing a Fund from selling such illiquid
securities at an advantageous time or price. Funds with principal
investment strategies that involve securities of companies with
smaller market capitalizations, foreign securities, derivatives or
securities with substantial market and/or credit risk tend to have
the greatest exposure to liquidity risk.
Derivatives All Funds except the Mega-Cap, Capital Appreciation, Mid-Cap,
Risk Micro-Cap and Small-Cap Value Funds may use derivatives, which are
financial contracts whose value depends on, or is derived from,
the value of an underlying asset, reference rate or index. The
various derivative instruments that the Funds may use are
referenced under "Characteristics and Risks of Securities and
Investment Techniques--Derivatives" in this Prospectus and
described in more detail under "Investment Objectives and
Policies" in the Statement of Additional Information. The Funds
may sometimes use derivatives as part of a strategy designed to
reduce exposure to other risks, such as interest rate or currency
risk. The Funds may also use derivatives for leverage, which
increases opportunities for gain but also involves greater risk of
loss due to leveraging risk. A Fund's use of derivative
instruments involves risks different from, or possibly greater
than, the risks associated with investing directly in securities
and other traditional investments. Derivatives are subject to a
number of risks described elsewhere in this section, such as
liquidity risk, market risk, credit risk and management risk. They
also involve the risk of mispricing or improper valuation and the
risk that changes in the value of the derivative may not correlate
perfectly with the underlying asset, rate or index. In addition, a
Fund's use of derivatives may increase or accelerate the amount of
taxes payable by shareholders. A Fund investing in a derivative
instrument could lose more than the principal amount invested.
Also, suitable derivative transactions may not be available in all
circumstances and there can be no assurance that a Fund will
engage in these transactions to reduce exposure to other risks
when that would be beneficial.
Sector In addition to other risks, Funds that invest a substantial
Specific portion of their assets in related industries (or "sectors") may
Risks have greater risk because companies in these sectors may share
common characteristics and may react similarly to market
developments.
Prospectus 50
<PAGE>
Technology Related Risk. Because the Global Innovation and
Innovation Funds concentrate their investments in companies which
utilize innovative technologies, they are subject to risks
particularly affecting those companies, such as the risks of short
product cycles and rapid obsolescence of products and services,
competition from new and existing companies, signficant losses
and/or limited earnings, security price volatility and limited
operating histories. Other Funds may also be subject to these
risks to the extent they invest their assets in technology or
technology-related companies.
Foreign A Fund that invests in foreign securities, and particularly the
(non- Global Innovation, Allianz Select International, Structured
U.S.) Emerging Markets, Tax-Efficient Structured Emerging Markets and
Investment International Funds, may experience more rapid and extreme changes
Risk in value than Funds that invest exclusively in securities of U.S.
issuers or securities that trade exclusively in U.S. markets. The
securities markets of many foreign countries are relatively small,
with a limited number of companies representing a small number of
industries. Additionally, issuers of foreign securities are
usually not subject to the same degree of regulation as U.S.
issuers. Reporting, accounting and auditing standards of foreign
countries differ, in some cases significantly, from U.S.
standards. Also, nationalization, expropriation or confiscatory
taxation, currency blockage, political changes or diplomatic
developments could adversely affect a Fund's investments in a
foreign country. In the event of nationalization, expropriation or
other confiscation, a Fund could lose its entire investment in
foreign securities. To the extent that a Fund, such as the Global
Innovation, Allianz Select International, Structured Emerging
Markets, Tax-Efficient Structured Emerging Markets or
International Fund, invests a significant portion of its assets in
a narrowly defined geographic area such as Europe, Asia or South
America, the Fund will generally have more exposure to regional
economic risks associated with foreign investments. Adverse
conditions in certain regions (such as Southeast Asia) can also
adversely affect securities of other countries whose economies
appear to be unrelated. In addition, special U.S. tax
considerations may apply to a Fund's investment in foreign
securities.
Foreign investment risk may be particularly high to the extent
Emerging that a Fund invests in emerging market securities of issuers based
Markets in countries with developing economies. These securities may
Risk present market, credit, currency, liquidity, legal, political and
other risks different from, or greater than, the risks of
investing in developed foreign countries. The Structured Emerging
Markets and Tax-Efficient Structured Emerging Markets Funds
normally invest most of their assets in emerging market securities
and are particularly sensitive to these risks. The Global
Innovation, Allianz Select International and International Funds
may also invest a significant portion of their assets in emerging
market securities. In addition, the risks associated with
investing in a narrowly defined geographic area (discussed above
under "Foreign (non-U.S.) Investment Risk") are generally more
pronounced with respect to investments in emerging market
countries.
Currency Funds that invest directly in foreign currencies or in securities
Risk that trade in, and receive revenues in, foreign currencies are
subject to the risk that those currencies will decline in value
relative to the U.S. Dollar, or, in the case of hedging positions,
that the U.S. Dollar will decline in value relative to the
currency being hedged. The Global Innovation, Allianz Select
International, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets and International Funds are
particularly sensitive to currency risk. Currency rates in foreign
countries may fluctuate significantly over short periods of time
for a number of reasons, including changes in interest rates,
intervention (or the failure to intervene) by U.S. or foreign
governments, central banks or supranational entities such as the
International Monetary Fund, or by the imposition of currency
controls or other political developments in the U.S. or abroad.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies or regions increases risk. Funds, such as
Risk the Select 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
51 PIMCO Funds: Multi-Manager Series
<PAGE>
issuers also may present substantial credit or other risks. The
Global Innovation, Allianz Select International, Structured
Emerging Markets, Tax-Efficient Structured Emerging Markets and
International Funds may be subject to increased risk to the extent
that they focus their investments in securities denominated in a
particular foreign currency or in a narrowly defined geographic
area outside the U.S., because companies in those areas may share
common characteristics and are often subject to similar business
risks and regulatory burdens, and their securities may react
similarly to economic, market, political or other developments.
Similarly, the Innovation and Global 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 to the extent they invest a substantial portion of
their assets in companies in related industries such as
"technology" or "financial and business services," which may share
common characteristics, are often subject to similar business
risks and regulatory burdens, and whose securities may react
similarly to economic, market, political or other developments.
Leverage, including borrowing, will cause the value of a Fund's
Leveraging shares to be more volatile than if the Fund did not use leverage.
Risk This is because leverage tends to exaggerate the effect of any
increase or decrease in the value of a Fund's portfolio
securities. The Funds, and in particular the Global Innovation,
Enhanced Equity, Tax-Efficient Equity, Structured Emerging
Markets, Tax-Efficient Structured Emerging Markets and
International 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. 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. The Growth & Income Fund is
particularly sensitive to this risk because it may invest in
interest rate sensitive securities such as corporate bonds.
As interest rates rise, the value of fixed income securities in a
Fund's portfolio are likely to decrease. Securities with longer
"durations" (defined below) tend to be more sensitive to changes
in interest rates, usually making them more volatile than
securities with shorter durations. Duration is a measure of the
expected life of a fixed income security that is used to determine
the sensitivity of a security's price to changes in interest
rates. Generally, a Fund with a longer average portfolio duration
will be more sensitive to changes in interest rates than a Fund
with a shorter average portfolio duration.
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.
High Funds that invest in high yield securities and unrated securities
Yield of similar quality (commonly known as "junk bonds") may be subject
Risk to greater levels of interest rate, credit and liquidity risk than
Funds that do not invest in such securities. The Growth & Income
Fund is particularly susceptible to this risk. These securities
are considered predominantly speculative with respect to the
issuer's continuing ability to make principal and interest
payments. An economic downturn or period of rising interest rates
could adversely affect the market for these securities and reduce
a Fund's ability to sell them.
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.
Prospectus 52
<PAGE>
Management of the Funds
Investment
Adviser
and
Administrator
PIMCO Advisors serves as the investment adviser and the
administrator (serving in its capacity as administrator, the
"Administrator") for the Funds. Subject to the supervision of the
Board of Trustees, PIMCO Advisors is responsible for managing,
either directly or through others selected by it, the investment
activities of the Funds and the Funds' business affairs and other
administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of September 30, 2000, PIMCO Advisors and its subsidiary
partnerships had approximately $272 billion in assets under
management.
PIMCO Advisors has retained investment management firms ("Sub-
Advisers") to manage each Fund's investments, except that the
PIMCO Equity Advisors division of PIMCO Advisors manages the
investments of the Equity Income, Value, Renaissance, Growth &
Income, Growth, Select Growth, Target, Opportunity, Innovation and
Global Innovation 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 LLC ("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, 2000, 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):
Fund Advisory Fees
----------------------------------------------------------------
Equity Income, Value, Capital Appreciation, Mid-Cap,
Enhanced Equity, Tax-Efficient Equity, Structured
Emerging Markets and
Tax-Efficient Structured Emerging Markets Funds 0.45%
Growth Fund 0.50%
Target and International Funds 0.55%
Renaissance, Select Growth and Small-Cap Value Funds 0.60%*
Growth & Income Fund 0.63%*
Opportunity and Innovation Funds 0.65%
Allianz Select International Fund 0.75%*
Micro-Cap Fund 1.25%
-------
* On April 1, 2000, the advisory fee rate for the Select Growth
Fund increased from 0.57% to 0.60% per annum. On May 8, 2000,
the advisory fee rate for the Allianz Select International Fund
decreased from 0.85% to 0.75% per annum. On August 1, 2000, the
advisory fee rate for the Growth & Income Fund decreased from
0.63% to 0.60% per annum.
The Global Innovation and Mega-Cap Funds were not operational
during the entire fiscal year ended June 30, 2000. The annual
investment advisory fee rates payable by those Funds are 1.00% and
0.45%, respectively (each stated as a percentage of the average
daily net assets of each Fund taken separately).
53 PIMCO Funds: Multi-Manager Series
<PAGE>
Administrative
Fees
Each Fund pays for the administrative services it requires under a
fee structure which is essentially fixed. Institutional and
Administrative Class shareholders of each Fund pay an
administrative fee to PIMCO Advisors, computed as a percentage of
the Fund's assets attributable in the aggregate to those classes
of shares. PIMCO Advisors, in turn, provides or procures
administrative services for Institutional and Administrative Class
shareholders and also bears the costs of most third-party services
required by the Funds, including audit, custodial, portfolio
accounting, legal, transfer agency and printing costs. The Funds
do bear other expenses which are not covered under the
administrative fee which may vary and affect the total level of
expenses paid by Institutional and Administrative Class
shareholders, such as brokerage fees, commissions and other
transaction expenses, costs of borrowing money, including interest
expenses, and fees and expenses of the Trust's disinterested
Trustees.
Institutional and Administrative Class shareholders of the Funds
pay PIMCO Advisors monthly administrative fees at the following
annual rates (stated as a percentage of the average daily net
assets attributable in the aggregate to the Fund's Institutional
and Administrative Class shares):
<TABLE>
<CAPTION>
Fund Administrative Fees
-------------------------------------------------------------------
<S> <C>
Allianz Select International, Structured Emerging
Markets, Tax-Efficient Structured Emerging
Markets and International Funds 0.50%
Global Innovation Fund 0.40%
All Other Funds 0.25%
</TABLE>
Sub- Each Sub-Adviser has full investment discretion and makes all
Advisers determinations with respect to the investment of a Fund's assets.
The following provides summary information about each Sub-Adviser,
including the Fund(s) it manages and its investment specialty.
<TABLE>
<CAPTION>
Sub-Adviser* Funds Investment Specialty
----------------------------------------------------------------------------
<S> <C> <C>
PIMCO Equity Advisors Equity Income, Value, Disciplined approach to
division of PIMCO Renaissance, Growth & identifying quality growth
Advisors ("PIMCO Equity Income, Growth, Select and/or undervalued
Advisors") Growth, Target, companies
1345 Avenue of the Opportunity, Innovation
Americas, 50th Floor and Global Innovation
New York, NY 10105
PIMCO/Allianz Allianz Select International stocks using
International Advisors International a research-driven "bottom-
LLC ("PAIA") up" approach.
1345 Avenue of the
Americas, 50th Floor
New York, NY 10105
Cadence Capital Mega-Cap, Capital A blend of growth
Management ("Cadence") Appreciation, Mid-Cap and companies whose stock is
Exchange Place, 53 State Micro-Cap reasonably valued by the
Street market
Boston, MA 02109
NFJ Investment Group Small-Cap Value Value stocks that the Sub-
("NFJ") Adviser believes are
2121 San Jacinto, Suite undervalued and/or offer
1840 above-average dividend
Dallas, TX 75201 yields
Parametric Portfolio Enhanced Equity, Tax- Stocks, using
Associates Efficient Equity, quantitatively-driven
("Parametric") Structured Emerging fundamental analysis and
7310 Columbia Center, Markets and Tax-Efficient economic methods, with a
701 Fifth Avenue Structured Emerging specialty in tax-efficient
Seattle, WA 98104 Markets products
Blairlogie Capital International International stocks using
Management Scottish standards of
("Blairlogie") prudent investment
4th Floor, 125 Princes management with modern
Street quantitative analytical
Edinburgh EH2 4AD, tools
Scotland
</TABLE>
-------
* PIMCO Equity Advisors is a division of PIMCO Advisors. PAIA is a
wholly-owned subsidiary of PIMCO Advisors. With the exception of
Blairlogie, 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 Manager(s) who have or share
primary responsibility for managing the Funds' investments.
PIMCO
Equity
Advisors
A division of PIMCO Advisors, PIMCO Equity Advisors provides
equity-related advisory services to mutual funds and institutional
accounts. Accounts managed by PIMCO Equity Advisors had combined
assets as of September 30, 2000 of approximately $14.5 billion.
See "Investment Adviser and Administrator" above for additional
information about PIMCO Advisors.
Prospectus 54
<PAGE>
The following individuals at PIMCO Equity Advisors have or share
primary responsibility for the noted Funds. A different sub-
advisory firm served as Sub-Adviser for each of the Growth,
Target, Opportunity and Innovation Funds prior to March 6, 1999,
for the Renaissance Fund prior to May 7, 1999, for the Select
Growth and Growth & Income Funds prior to July 1, 1999, and for
the Equity Income and Value Funds prior to May 8, 2000.
<TABLE>
<CAPTION>
Portfolio
Fund Manager(s) Since Recent Professional Experience
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Equity Income Kenneth W. Corba 5/00 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.
Value John K. Schneider 5/00 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.
Renaissance Mr. Schneider 5/99 See above.
Growth & Income Mr. Corba 7/99 See above.
Peter C. Thoms 8/00 Investment Analyst at Federated
Investors from July 1998 to May
1999. Previously, he received his
M.B.A. at the University of
Virginia's Darden School of
Business.
Growth Mr. Corba 5/99 See above.
Select Growth Messrs. Corba and 7/99 See above.
Schneider
Target Mr. Corba 3/99 See above.
Jeff Parker 3/99 Assistant Portfolio Manager and
Research Analyst for PIMCO Equity
Advisors. Prior to joining PIMCO
Equity Advisors, he managed equity
accounts as an Assistant Portfolio
Manager at Eagle Asset Management
from 1996 to 1998. He was a Senior
Consultant with Andersen Consulting,
specializing in healthcare and
technology, from 1991 to 1994.
Opportunity Michael F. Gaffney 3/99 Managing Director of PIMCO Equity
Advisors, where he manages the
Opportunity Fund and other small-cap
products. Prior to joining PIMCO
Advisors, he was with Alliance
Capital Management L.P. from 1993 to
1999, serving in various capacities
including as Senior Vice President
and Portfolio Manager.
Innovation Dennis P. McKechnie 10/98 Portfolio Manager of PIMCO Equity
Advisors. Prior to joining PIMCO
Advisors, he was with Columbus
Circle Investors from 1991 to 1999,
where he managed equity accounts and
served in various capacities
including as Portfolio Manager for
the Innovation Fund.
<CAPTION>
Global Mr. McKechnie 12/99+ See above.
Innovation
Jiyoung Kim 4/00 Senior Research Analyst for PIMCO
Innovation Fund, where she covers
biotechnology, telecommunications
equipment, semiconductors and
networking. Prior to joining PIMCO
Equity Advisors in 1999, she was a
Senior Research Analyst at Fred
Alger Management from 1994 to 1999.
Prior to that, she was a Senior
Research Technician at Repligen, a
biopharmaceutical company.
</TABLE>
-------
+ Since inception of the Fund. 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.
55PIMCO Funds: Multi-Manager Series
<PAGE>
PAIA A wholly-owned subsidiary of PIMCO Advisors, PAIA provides
international advisory services to mutual funds. PAIA commenced
operations during the fourth quarter of 2000. Different firms
served as sub-adviser to the Allianz Select International Fund
prior to November 1, 2000.
The following individuals at PAIA share primary responsibility
for the Allianz Select International Fund.
<TABLE>
<CAPTION>
Fund Portfolio Manager(s) Since Recent Professional Experience
---------------------------------------------------------------------------------
<S> <C> <C>
Allianz Udo Frank (lead manager) 11/00 Managing Director and Chief
Select Investment Officer of Allianz
International Asset Advisory and Management
GmbH ("Allianz AAM"),
responsible for the entire
investment area (since 1997),
and Chief Executive Officer
and Chief Investment Officer
of Allianz PIMCO Asset
Management. Previously, Mr.
Frank served as the Chief
Investment Officer of Allianz
KAG (since 1994).
Wolfram Gerdes (co-manager) 11/00 Managing director of Equity
Portfolio Management at
Allianz AAM since 1998. Prior
to joining Allianz AAM, he
held various positions,
including head of Portfolio
Management, with Allianz
Lebensversicherungs AG from
1992 to 1998.
Gerd Wolfgang Hintz (co-manager) 11/00 Managing Director of the
Equity Research Department at
Allianz AAM since 1998. In
addition, he has been
responsible for Allianz AAM's
trading department since
January 2000. Previously, he
was the head of Research and
Investor Relations of Allianz
AG.
</TABLE>
Cadence An affiliated sub-partnership of PIMCO Advisors, Cadence provides
advisory services to mutual funds and institutional accounts.
Cadence Capital Management Corporation, the predecessor investment
adviser to Cadence, commenced operations in 1988. Accounts managed
by Cadence had combined assets as of September 30, 2000 of
approximately $6.8 billion.
The following individuals at Cadence share primary
responsibility for each of the noted Funds.
<TABLE>
<CAPTION>
Portfolio
Fund Manager(s) Since Recent Professional Experience
------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Mega-Cap David B. Breed 9/99* Managing Director, Chief Executive
Officer, Chief Investment Officer
and founding partner of Cadence.
Member of the Management Board of
PIMCO Advisors. He is a research
generalist and has lead the team of
portfolio managers and analysts
since 1988. Mr. Breed has managed
separate equity accounts for many
institutional clients and has led
the team that manages the PIMCO
Funds sub-advised by Cadence since
those Funds' inception dates.
William B. Bannick 9/99* Managing Director and Executive Vice
President at Cadence. Mr. Bannick is
a research generalist and Senior
Portfolio Manager for the Cadence
team. He has managed separately
managed equity accounts for various
Cadence institutional clients and
has been a member of the team that
manages the PIMCO Funds sub-advised
by Cadence since joining Cadence in
1992.
Katherine A. Burdon 9/99* Managing Director and Senior
Portfolio Manager at Cadence. Ms.
Burdon is a research generalist and
has managed separately managed
equity accounts for various Cadence
institutional clients and has been a
member of the team that manages the
PIMCO Funds sub-advised by Cadence
since joining Cadence in 1993.
Peter B. McManus 9/99* Director, Account Management at
Cadence. He has been a member of the
investment team at Cadence and
handles client relationships of
separately managed accounts, and has
been a member of the team that
manages the PIMCO Funds sub-advised
by Cadence since joining Cadence in
1994. Previously, he served as a
Vice President of Bank of Boston
from 1991 to 1994.
Capital Appreciation Mr. Breed 3/91* See above.
Mr. Bannick 10/92 See above.
Ms. Burdon 1/93 See above.
Mr. McManus 10/94 See above.
Mid-Cap Mr. Breed 8/91* See above.
Messrs. Bannick and Same as See above.
McManus and Capital
Ms. Burdon Appreciation
Fund
Micro-Cap Messrs. Breed and 6/93* See above.
Bannick and Ms.
Burdon
Mr. McManus 10/94 See above.
</TABLE>
-------
*Since inception of the Fund.
Prospectus 56
<PAGE>
NFJ An affiliated sub-partnership of PIMCO Advisors, NFJ provides
advisory services to mutual funds and institutional accounts. NFJ
Investment Group, Inc., the predecessor investment adviser to NFJ,
commenced operations in 1989. Accounts managed by NFJ had combined
assets as of September 30, 2000 of approximately $1.8 billion.
The following individuals at NFJ share primary responsibility
for the noted Fund.
<TABLE>
<CAPTION>
Portfolio
Fund Manager(s) Since Recent Professional Experience
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Small-Cap Value Chris Najork 10/91* Managing Director and founding
partner of NFJ. He has 30 years'
experience encompassing equity
research and portfolio management.
Prior to the formation of NFJ in
1989, he was a senior vice
president, senior portfolio manager
and analyst at NationsBank, which he
joined in 1974.
Benno J. Fischer 10/91* Managing Director and founding
partner of NFJ. He has 32 years'
experience in portfolio management,
investment analysis and research.
Prior to the formation of NFJ in
1989, he was chief investment
officer (institutional and fixed
income), senior vice president and
senior portfolio manager at
NationsBank, which he joined in
1971. Prior to joining NationsBank,
Mr. Fischer was a securities analyst
at Chase Manhattan Bank and Clark,
Dodge.
Paul A. Magnuson 7/95 Principal at NFJ. He is a Portfolio
Manager and Senior Research Analyst
with 14 years' experience in equity
analysis and portfolio management.
Prior to joining NFJ in 1992, he was
an assistant vice president at
NationsBank, which he joined in
1985. Within the Trust Investment
Qualitative Services Division of
NationsBank, he was responsible for
equity analytics and structured
fund management.
</TABLE>
-------
*Since inception of the Fund.
Parametric An affiliated sub-partnership of PIMCO Advisors, Parametric
provides advisory services to mutual funds and institutional
accounts. Parametric Portfolio Associates, Inc., the predecessor
investment adviser to Parametric, commenced operations in 1987.
Accounts managed by Parametric had combined assets as of September
30, 2000 of approximately $4.4 billion.
The following individuals share primary responsibility for each
of the noted Funds.
<TABLE>
<CAPTION>
Portfolio
Fund Manager(s) Since Recent Professional Experience
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Enhanced Equity David Stein 7/96* Managing Director of Parametric. He
has been with Parametric since 1996
where he leads the investment,
research and product development
activities. Previously, he served in
Investment Research at GTE
Corporation from 1995 to 1996, in
Equity Research at Vanguard Group
from 1994 to 1995 and in Investment
Research at IBM Corporation from
1977 to 1994.
Tom Seto 10/98* Vice President and Portfolio Manager
of Parametric. Since joining
Parametric in 1998, he has been
responsible for management of
Parametric's active U.S. equity
strategies and has managed
structured equity portfolios.
Previously, he was with Barclays
Global Investors from 1991 to 1998,
serving in various capacities
including as head of U.S. Equity
Index Investments and Portfolio
Manager.
Tax-Efficient Equity Messrs. Stein and 9/98* See above.
Seto
Structured Emerging Messrs. Stein and 6/98* See above.
Markets Seto
Cliff Quisenberry 6/98* Vice President and Global Portfolio
Manager of Parametric. He joined
Parametric in 1998 where he heads
international investments in both
developed and emerging markets.
Previously, he served as Vice
President and Portfolio Manager at
Cutler & Co. from 1990 to 1994 and
as a Securities Analyst and
Portfolio Manager at Fred Alger
Management from 1987 to 1998.
Tax-Efficient Structured Messrs. Stein, Seto 6/98* See above.
Emerging Markets and Quisenberry
</TABLE>
-------
*Since inception of the Fund.
57PIMCO Funds: Multi-Manager Series
<PAGE>
Blairlogie Blairlogie provides advisory services to mutual funds and
institutional accounts. Blairlogie Capital Management Ltd., the
predecessor investment adviser to Blairlogie, commenced operations
in 1992. Accounts managed by Blairlogie had combined assets as of
September 30, 2000 of approximately $1.0 billion.
Blairlogie is an indirect majority-owned subsidiary of the
Alleghany Corporation, and is not an affiliate of PIMCO Advisors.
Blairlogie was formerly an affiliated sub-partnership of PIMCO
Advisors. On April 30, 1999, PIMCO Advisors sold all of its
ownership interest in Blairlogie to subsidiaries of the Alleghany
Corporation. PIMCO Advisors retained Blairlogie as the Sub-Adviser
of the International Fund both prior and subsequent to this
transaction.
The following individual at Blairlogie has primary responsibility
for the International Fund.
<TABLE>
<CAPTION>
Fund Portfolio Manager Since Recent Professional Experience
--------------------------------------------------------------------------
<S> <C> <C> <C>
International James Smith 11/94 Chief Investment Officer of Blairlogie
since 1992, responsible for setting
investment policy, asset allocation,
managing the investment team and stock
selection in Latin America.
</TABLE>
Adviser/Sub-Adviser
Relationship
Shareholders of each Fund (except the Innovation, Mid-Cap and
Micro-Cap Funds) have approved a proposal permitting PIMCO
Advisors to enter into new or amended sub-advisory agreements with
one or more sub-advisers with respect to each Fund without
obtaining shareholder approval of such agreements, subject to the
conditions of an exemptive order that has been granted by the
Securities and Exchange Commission. One of the conditions requires
the Board of Trustees to approve any such agreement. In addition,
the exemptive order prohibits PIMCO Advisors from entering into
sub-advisory agreements with affiliates of PIMCO Advisors without
shareholder approval, unless those affiliates are substantially
wholly-owned by PIMCO Advisors. PIMCO Advisors has the ultimate
responsibility to oversee the Sub-Advisers and to recommend their
hiring, termination and replacement.
Distributor The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stamford, Connecticut 06902, is a broker-
dealer registered with the Securities and Exchange Commission.
Prospectus 58
<PAGE>
Investment Options --
Institutional Class and Administrative Class Shares
The Trust offers investors Institutional Class and Administrative
Class shares of the Funds in this Prospectus.
The Trust does not charge any sales charges (loads) or other fees
in connection with purchases, sales (redemptions) or exchanges of
Institutional Class or Administrative Class shares, except that a
1.00% Fund Reimbursement Fee may apply to transactions involving
shares of the Structured Emerging Markets and Tax-Efficient
Structured Emerging Markets Funds. See "Purchases, Redemptions and
Exchanges--Fund Reimbursement Fees" below.
Administrative Class shares are generally subject to a higher
level of operating expenses than Institutional Class shares due to
the additional service and/or distribution fees paid by
Administrative Class shares as described below. Therefore,
Institutional Class shares will generally pay higher dividends and
have a more favorable investment return than Administrative Class
shares.
. Service and Distribution (12b-1) Fees--Administrative Class
Shares. The Trust has adopted an Administrative Services Plan for
the Administrative Class shares of each Fund. It has also adopted
a Distribution Plan for the Administrative Class shares of each
Fund. Each Plan has been adopted in accordance with the
requirements of Rule 12b-1 under the Investment Company Act of
1940 and is administered in accordance with that rule. However,
shareholders do not have the voting rights set forth in Rule 12b-1
with respect to the Administrative Services Plan.
Each Plan allows the Funds to use its Administrative Class assets
to reimburse financial intermediaries that provide services
relating to Administrative Class shares. The Distribution Plan
permits reimbursement for expenses in connection with the
distribution and marketing of Administrative Class shares and/or
the provision of shareholder services to Administrative Class
shareholders. The Administrative Services Plan permits
reimbursement for services in connection with the administration
of plans or programs that use Administrative Class shares of the
Funds as their funding medium and for related expenses.
In combination, the Plans permit a Fund to make total
reimbursements at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to its Administrative Class
shares. The same entity may not receive both distribution and
administrative services fees with respect to the same
Administrative Class assets, but may receive fees under each Plan
with respect to separate assets. Because these fees are paid out
of a Fund's Administrative Class assets on an ongoing basis, over
time they will increase the cost of an investment in
Administrative Class shares and may cost an investor more than
other types of sales charges.
. Arrangements with Service Agents. Institutional Class and
Administrative Class shares of the Funds may be offered through
certain brokers and financial intermediaries ("service agents")
that have established a shareholder servicing relationship with
the Trust on behalf of their customers. The Trust pays no
compensation to such entities other than service and/or
distribution fees paid with respect to Administrative Class
shares. Service agents may impose additional or different
conditions than the Trust on purchases, redemptions or exchanges
of Fund shares by their customers. Service agents may also
independently establish and charge their customers transaction
fees, account fees and other amounts in connection with purchases,
sales and redemptions of Fund shares in addition to any fees
charged by the Trust. These additional fees may vary over time and
would increase the cost of the customer's investment and lower
investment returns. Each service agent is responsible for
transmitting to its customers a schedule of any such fees and
information regarding any additional or different conditions
regarding purchases, redemptions and exchanges. Shareholders who
are customers of service agents should consult their service
agents for information regarding these fees and conditions.
59 PIMCO Funds: Multi-Manager Series
<PAGE>
Purchases, Redemptions and Exchanges
Purchasing Investors may purchase Institutional Class and Administrative
Shares Class shares of the Funds at the relevant net asset value ("NAV")
of that class without a sales charge or other fee, except that a
1.00% Fund Reimbursement Fee may apply to transactions involving
shares of the Structured Emerging Markets and Tax-Efficient
Structured Emerging Markets Funds. See "Fund Reimbursement Fees"
below.
Institutional Class shares are offered primarily for direct
investment by investors such as pension and profit sharing plans,
employee benefit trusts, endowments, foundations, corporations and
high net worth individuals. Institutional Class shares may also be
offered through certain financial intermediaries that charge their
customers transaction or other fees with respect to their
customers' investments in the Funds.
Administrative Class shares are offered primarily through
employee benefit plan alliances, broker-dealers and other
intermediaries, and each Fund pays service and/or distribution
fees to these entities for services they provide to Administrative
Class shareholders.
Pension and profit-sharing plans, employee benefit trusts and
employee benefit plan alliances and "wrap account" programs
established with broker-dealers or financial intermediaries may
purchase shares of either class only if the plan or program for
which the shares are being acquired will maintain an omnibus or
pooled account for each Fund and will not require a Fund to pay
any type of administrative payment per participant account to any
third party.
. Investment Minimums. The minimum initial investment for shares
of either class is $5 million, except that the minimum initial
investment for a registered investment adviser purchasing
Institutional Class shares for its clients through omnibus
accounts is $250,000 per Fund. At the discretion of PIMCO
Advisors, the minimum initial investment may be waived for
Institutional or Administrative Class shares offered to clients of
PIMCO Equity Advisors, PAIA, Cadence, NFJ, Pacific Investment
Management Company, Parametric, and their affiliates, and to the
benefit plans of PIMCO Advisors and its affiliates. In addition,
the minimum initial investment does not apply to Institutional
Class shares offered through fee-based programs sponsored and
maintained by a registered broker-dealer and approved by the
Distributor in which each investor pays an asset based fee at an
annual rate of at least 0.50% of the assets in the account to a
financial intermediary for investment advisory and/or
administrative services.
The Trust and the Distributor may waive the minimum initial
investment for other categories of investors at their discretion.
The investment minimums discussed in this section and the
limitations set forth in "Investment Limitations" below do not
apply to participants in PIMCO Advisors Portfolio Strategies, a
managed product sponsored by PIMCO Advisors.
. Timing of Purchase Orders and Share Price Calculations. A
purchase order received by the Trust's transfer agent, National
Financial Data Services (the "Transfer Agent"), prior to the close
of regular trading (normally 4:00 p.m., Eastern time) on the New
York Stock Exchange, on a day the Trust is open for business,
together with payment made in one of the ways described below,
will be effected at that day's net asset value ("NAV"). An order
received after the close of regular trading on the New York Stock
Exchange will be effected at the NAV determined on the next
business day. However, orders received by certain retirement plans
and other financial intermediaries on a business day prior to the
close of regular trading on the New York Stock Exchange and
communicated to the Transfer Agent prior to 9:00 a.m., Eastern
time, on the following business day will be effected at the NAV
determined on the prior business day. The Trust is "open for
business" on each day the New York Stock Exchange is open for
trading, which excludes the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Purchase orders will be accepted only on days on
which the Trust is open for business.
Prospectus 60
<PAGE>
. Initial Investment. Investors may open an account by
completing and signing a Client Registration Application and
mailing it to PIMCO Funds at 840 Newport Center Drive, Suite 300,
Newport Beach, California 92660. A Client Registration Application
may be obtained by calling 1-800-927-4648.
Except as described below, an investor may purchase Institutional
Class and Administrative Class shares only by wiring federal funds
to the Transfer Agent, National Financial Data Services, 330 West
9th Street, 4th Floor, Kansas City, Missouri 64105. Before wiring
federal funds, the investor must telephone the Trust at 1-800-927-
4648 to receive instructions for wire transfer and must provide
the following information: name of authorized person, shareholder
name, shareholder account number, name of Fund and share class,
amount being wired, and wiring bank name.
An investor may purchase shares without first wiring federal
funds if the proceeds of the investment are derived from an
advisory account the investor maintains with PIMCO Advisors or one
of its affiliates, from surrender or other payment from an
annuity, insurance, or other contract held by Pacific Life
Insurance Company LLC, or from an investment by broker-dealers,
institutional clients or other financial intermediaries which have
established a shareholder servicing relationship with the Trust on
behalf of their customers.
. Additional Investments. An investor may purchase additional
Institutional Class and Administrative Class shares of the Funds
at any time by calling the Trust and wiring federal funds to the
Transfer Agent as outlined above.
. Other Purchase Information. Purchases of a Fund's
Institutional Class and Administrative Class shares will be made
in full and fractional shares. In the interest of economy and
convenience, certificates for shares will not be issued.
The Trust and the Distributor each reserves the right, in its
sole discretion, to suspend the offering of shares of the Funds or
to reject any purchase order, in whole or in part, when, in the
judgment of management, such suspension or rejection is in the
best interests of the Trust.
An investor should invest in the Funds for long-term investment
purposes only. The Trust and PIMCO Advisors each reserves the
right to restrict purchases of Fund shares (including exchanges)
when a pattern of frequent purchases and sales made in response to
short-term fluctuations in share price appears evident. Notice of
any such restrictions, if any, will vary according to the
particular circumstances.
Institutional Class and Administrative Class shares of the Trust
may not be qualified or registered for sale in all states.
Investors should inquire as to whether shares of a particular Fund
are available for offer and sale in the investor's state of
residence. Shares of the Trust may not be offered or sold in any
state unless registered or qualified in that jurisdiction or
unless an exemption from registration or qualification is
available.
Subject to the approval of the Trust, an investor may purchase
shares of a Fund with liquid securities that are eligible for
purchase by the Fund (consistent with the Fund's investment
policies and restrictions) and that have a value that is readily
ascertainable in accordance with the Trust's valuation policies.
These transactions will be effected only if PIMCO Advisors or a
Sub-Adviser intends to retain the security in the Fund as an
investment. Assets purchased by a Fund in such a transaction will
be valued in generally the same manner as they would be valued for
purposes of pricing the Fund's shares, if such assets were
included in the Fund's assets at the time of purchase. The Trust
reserves the right to amend or terminate this practice at any
time.
. Retirement Plans. Shares of the Funds are available for
purchase by retirement and savings plans, including Keogh plans,
401(k) plans, 403(b) custodial accounts, and Individual Retirement
Accounts. The administrator of a plan or employee benefits office
can provide participants or employees with detailed information on
how to participate in the plan and how to elect a Fund as an
investment option. Participants in a retirement or savings plan
may be permitted to elect different investment options, alter the
amounts
61PIMCO Funds: Multi-Manager Series
<PAGE>
contributed to the plan, or change how contributions are allocated
among investment options in accordance with the plan's specific
provisions. The plan administrator or employee benefits office
should be consulted for details. For questions about participant
accounts, participants should contact their employee benefits
office, the plan administrator, or the organization that provides
recordkeeping services for the plan. Investors who purchase shares
through retirement plans should be aware that plan administrators
may aggregate purchase and redemption orders for participants in
the plan. Therefore, there may be a delay between the time the
investor places an order with the plan administrator and the time
the order is forwarded to the Transfer Agent for execution.
. Fund Reimbursement Fees. Investors in Institutional Class and
Administrative Class shares of the Structured Emerging Markets and
Tax-Efficient Structured Emerging Markets Funds are subject to a
"Fund Reimbursement Fee," both at the time of purchase and at the
time of redemption, equal to 1.00% of the net asset value of the
shares purchased or redeemed. Fund Reimbursement Fees are not paid
separately, but are deducted automatically from the amount
invested or the amount to be received in connection with a
redemption. Fund Reimbursement Fees are paid to and retained by
the Funds to defray certain costs described below and are not paid
to or retained by PIMCO Advisors, the Fund's Sub-Adviser, or the
Distributor. Fund Reimbursement Fees are not sales loads or
contingent deferred sales charges. Reinvestment of dividends and
capital gains distributions paid to shareholders by the Funds are
not subject to Fund Reimbursement Fees, but redemptions and
exchanges of shares acquired by these reinvestments are subject to
Fund Reimbursement Fees unless a waiver applies.
The purpose of the Fund Reimbursement Fees is to defray the costs
associated with investing the proceeds of the sale of the Fund's
shares (in the case of purchases) or the costs associated with the
sale of portfolio securities to satisfy redemption requests (in
the case of redemptions), thereby insulating existing shareholders
from such costs. The amount of a Fund Reimbursement Fee represents
the Sub-Adviser's estimate of the costs reasonably anticipated to
be incurred by the Funds in connection with the purchase or sale
of portfolio securities, including international stocks,
associated with an investor's purchase or redemption. These costs
include brokerage costs, market impact costs (i.e., the increase
in market prices which may result when a Fund purchases or sells
thinly traded stocks) and the effect of "bid/asked" spreads in
international markets. Transaction costs incurred when purchasing
or selling stocks of companies in foreign countries, and
particularly emerging market countries, may be significantly
higher than those in more developed countries. This is due, in
part, to less competition among brokers, underutilization of
technology on the part of foreign exchanges and brokers, the lack
of less expensive investment options (such as derivative
instruments) and lower levels of liquidity in foreign and
underdeveloped markets.
Waiver of Fund Reimbursement Fees. Former participants in the
Parametric Portfolio Associates Emerging Markets Trust will not be
subject to Fund Reimbursement Fees with respect to any shares of
the Structured Emerging Markets and Tax-Efficient Structured
Emerging Markets Funds they acquired through June 30, 1998, and
will not be subject to Fund Reimbursement Fees upon the subsequent
redemption (including any redemption in connection with an
exchange) of any shares acquired by any such participant through
June 30, 1998. Such participants will be subject to such Fund
Reimbursement Fees to the same extent as any other shareholder on
any shares of either Fund acquired (whether by reinvestment of
dividends or capital gain distributions or otherwise) after June
30, 1998.
Redeeming
Shares
. Redemptions by Mail. An investor may redeem (sell)
Institutional Class and Administrative Class shares by submitting
a written request to PIMCO Funds at 840 Newport Center Drive,
Suite 300, Newport Beach, California 92660. The redemption request
should state the Fund from which the shares are to be redeemed,
the class of shares, the number or dollar amount of the shares to
be redeemed and the account number. The request must be signed
exactly as the names of the registered owners appear on the
Trust's account records,
Prospectus 62
<PAGE>
and the request must be signed by the minimum number of persons
designated on the Client Registration Application that are
required to effect a redemption.
. Redemptions by Telephone or Other Wire Communication. An
investor that elects this option on the Client Registration
Application (or subsequently in writing) may request redemptions
of shares by calling the Trust at 1-800-927-4648, by sending a
facsimile to 1-949-725-6830, by sending an e-mail to
[email protected] or by other means of wire
communication. Investors should state the Fund and class from
which the shares are to be redeemed, the number or dollar amount
of the shares to be redeemed, the account number and the signature
(which may be an electronic signature) of an authorized signatory.
Redemption requests of an amount of $10 million or more may be
initiated by telephone or e-mail, but must be confirmed in writing
by an authorized party prior to processing.
In electing a telephone redemption, the investor authorizes
Pacific Investment Management Company and the Transfer Agent to
act on telephone instructions from any person representing himself
to be the investor, and reasonably believed by Pacific Investment
Management Company or the Transfer Agent to be genuine. Neither
the Trust nor the Transfer Agent may be liable for any loss, cost
or expense for acting on instructions (whether in writing or by
telephone) believed by the party receiving such instructions to be
genuine and in accordance with the procedures described in this
Prospectus. Shareholders should realize that by electing the
telephone or wire or e-mail redemption option, they may be giving
up a measure of security that they might have if they were to
redeem their shares in writing. Furthermore, interruptions in
service may mean that a shareholder will be unable to effect a
redemption by telephone or e-mail when desired. The Transfer Agent
also provides written confirmation of transactions initiated by
telephone as a procedure designed to confirm that telephone
instructions are genuine (written confirmation is also provided
for redemption requests received in writing or via e-mail). All
telephone transactions are recorded, and Pacific Investment
Management Company or the Transfer Agent may request certain
information in order to verify that the person giving instructions
is authorized to do so. The Trust or Transfer Agent may be liable
for any losses due to unauthorized or fraudulent telephone
transactions if it fails to employ reasonable procedures to
confirm that instructions communicated by telephone are genuine.
All redemptions, whether initiated by letter or telephone, will be
processed in a timely manner, and proceeds will be forwarded by
wire in accordance with the redemption policies of the Trust
detailed below. See "Other Redemption Information."
Shareholders may decline telephone exchange or redemption
privileges after an account is opened by instructing the Transfer
Agent in writing at least seven business days prior to the date
the instruction is to be effective. Shareholders may experience
delays in exercising telephone redemption privileges during
periods of abnormal market activity. During periods of volatile
economic or market conditions, shareholders may wish to consider
transmitting redemption orders by telegram, facsimile or overnight
courier.
Defined contribution plan participants may request redemptions by
contacting the employee benefits office, the plan administrator or
the organization that provides recordkeeping services for the
plan.
. Other Redemption Information. Redemption requests for Fund
shares are effected at the NAV per share next determined after
receipt of a redemption request by the Trust or its designee. The
request must properly identify all relevant information, such as
account number, redemption amount (in dollars or shares) and the
Fund name, and must be executed or initialed by the appropriate
signatories. A redemption request received by the Trust or its
designee prior to the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m., Eastern time), on a day the
Trust is open for business, is effective on that day. A redemption
request received after that time becomes effective on the next
business day.
Unless eligible for a waiver, shareholders of the Structured
Emerging Markets and Tax-Efficient Structured Emerging Markets
Funds who redeem their shares will pay a Fund Reimbursement Fee
equal to 1.00% of the NAV of the shares redeemed. See "Fund
Reimbursement Fees" above.
63PIMCO Funds: Multi-Manager Series
<PAGE>
Redemption proceeds will ordinarily be wired to the investor's
bank within three business days after the redemption request, but
may take up to seven business days. Redemption proceeds will be
sent by wire only to the bank name designated on the Client
Registration Application. The Trust may suspend the right of
redemption or postpone the payment date at times when the New York
Stock Exchange is closed, or during certain other periods as
permitted under the federal securities laws.
For shareholder protection, a request to change information
contained in an account registration (for example, a request to
change the bank designated to receive wire redemption proceeds)
must be received in writing, signed by the minimum number of
persons designated on the Client Registration Application that are
required to effect a redemption, and accompanied by a signature
guarantee from any eligible guarantor institution, as determined
in accordance with the Trust's procedures. Shareholders should
inquire as to whether a particular institution is an eligible
guarantor institution. A signature guarantee cannot be provided by
a notary public. In addition, corporations, trusts, and other
institutional organizations are required to furnish evidence of
the authority of the persons designated on the Client Registration
Application to effect transactions for the organization.
Due to the relatively high cost of maintaining small accounts,
the Trust reserves the right to redeem Institutional Class and
Administrative Class shares in any account for their then-current
value (which will be promptly paid to the investor) if at any
time, due to redemption by the investor, the shares in the account
do not have a value of at least $100,000. A shareholder will
receive advance notice of a mandatory redemption and will be given
at least 30 days to bring the value of its account up to at least
$100,000. This mandatory redemption policy does not apply to
participants in PIMCO Advisors Portfolio Strategies, a managed
product sponsored by PIMCO Advisors.
The Trust agrees to redeem shares of each Fund solely in cash up
to the lesser of $250,000 or 1% of the Fund's net assets during
any 90-day period for any one shareholder. In consideration of the
best interests of the remaining shareholders, the Trust reserves
the right to pay any redemption proceeds exceeding this amount in
whole or in part by a distribution in kind of securities held by a
Fund in lieu of cash. Except for Funds with a tax-efficient
management strategy, it is highly unlikely that shares would ever
be redeemed in kind. When shares are redeemed in kind, the
redeeming shareholder should expect to incur transaction costs
upon the disposition of the securities received in the
distribution.
Redemptions of Fund shares may be suspended when trading on the
New York Stock Exchange is restricted or during an emergency which
makes it impracticable for the Funds to dispose of their
securities or to determine fairly the value of their net assets,
or during any other period as permitted by the Securities and
Exchange Commission for the protection of investors. Under these
and other unusual circumstances, the Trust may suspend redemptions
or postpone payment for more than seven days, as permitted by law.
Exchange Except as provided below, an investor may exchange Institutional
Privilege Class or Administrative Class shares of a Fund for shares of the
same class of any other Fund or other series of the Trust that
offers that class based on the respective NAVs of the shares
involved. An exchange may be made by following the redemption
procedure described above under "Redemptions by Mail" or, if the
investor has elected the telephone redemption option, by calling
the Trust at 1-800-927-4648. An investor may also exchange shares
of a Fund for shares of the same class of a series of PIMCO Funds:
Pacific Investment Management Series, an affiliated mutual fund
family composed primarily of fixed income portfolios managed by
Pacific Investment Management Company, subject to any restrictions
on exchanges set forth in the applicable series' prospectus(es).
Shareholders interested in such an exchange may request a
prospectus for these other series by contacting PIMCO Funds:
Pacific Investment Management Series at the same address and
telephone number as the Trust.
Prospectus 64
<PAGE>
Unless eligible for a waiver, shareholders who exchange their
Institutional Class or Administrative Class shares of a Fund for
the same class of shares of the Structured Emerging Markets or
Tax-Efficient Structured Emerging Markets Fund will be subject to
a Fund Reimbursement Fee of 1.00% of the NAV of the shares of
these Funds acquired in connection with the exchange. Also,
shareholders who exchange shares of the Structured Emerging
Markets Fund or Tax-Efficient Structured Emerging Markets Fund for
shares of any other Fund will be subject to a Fund Reimbursement
Fee of 1.00% of the NAV of the shares of these Funds redeemed in
connection with the exchange. See "Fund Reimbursement Fees" above.
An investor may exchange shares only with respect to Funds or
other eligible series that are registered in the investor's state
of residence or where an exemption from registration is available.
In addition, an exchange is generally a taxable event which will
generate capital gains or losses, and special rules may apply in
computing tax basis when determining gain or loss. See "Tax
Consequences" in this Prospectus and "Taxation" in the Statement
of Additional Information.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Fund and its shareholders. In particular, a pattern of
exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Fund. Currently, the Trust limits the number of "round
trip" exchanges investors may make. An investor makes a "round
trip" exchange when the investor purchases shares of a particular
Fund, subsequently exchanges those shares for shares of a
different PIMCO Fund, and then exchanges back into the originally
purchased Fund. The Trust has the right to refuse any exchange for
any investor who completes (by making the exchange back into the
shares of the originally purchased Fund) more than six round trip
exchanges in any twelve-month period. The Trust reserves the right
to impose additional restrictions on exchanges at any time,
although it will attempt to give shareholders 30 days' prior
notice whenever it is reasonably able to do so.
How Fund Shares Are Priced
The net asset value ("NAV") of a Fund's Institutional and
Administrative Class shares is determined by dividing the total
value of a Fund's portfolio investments and other assets
attributable to that class, less any liabilities, by the total
number of shares outstanding of that class.
For purposes of calculating the NAV, portfolio securities and
other assets for which market quotes are available are stated at
market value. Market value is generally determined on the basis of
last reported sales prices, or if no sales are reported, based on
quotes obtained from a quotation reporting system, established
market makers, or pricing services. Certain securities or
investments for which daily market quotes are not readily
available may be valued, pursuant to procedures established by the
Board of Trustees, with reference to other securities or indices.
Short-term investments having a maturity of 60 days or less are
generally valued at amortized cost. Exchange traded options,
futures and options on futures are valued at the settlement price
determined by the exchange. Other securities for which market
quotes are not readily available are valued at fair value as
determined in good faith by the Board of Trustees or persons
acting at their direction.
Investments initially valued in currencies other than the U.S.
dollar are converted to U.S. dollars using exchange rates obtained
from pricing services. As a result, the NAV of a Fund's shares may
be affected by changes in the value of currencies in relation to
the U.S. dollar. The value of securities traded in markets outside
the United States or denominated in currencies other than the U.S.
dollar may be affected significantly on a day that the New York
Stock Exchange is closed and an investor is not able to purchase,
redeem or exchange shares. In particular, calculation of the NAV
of the Global Innovation, Allianz Select International, Structured
Emerging Markets, Tax-Efficient Structured Emerging Markets and
International Funds may not take place contemporaneously with the
determination of the prices of foreign securities used in NAV
calculations.
65PIMCO Funds: Multi-Manager Series
<PAGE>
Fund shares are valued at the close of regular trading (normally
4:00 p.m., Eastern time) (the "NYSE Close") on each day that the
New York Stock Exchange is open. For purposes of calculating the
NAV, the Funds normally use pricing data for domestic equity
securities received shortly after the NYSE Close and do not
normally take into account trading, clearances or settlements that
take place after the NYSE Close. Domestic fixed income and foreign
securities are normally priced using data reflecting the earlier
closing of the principal markets for those securities. Information
that becomes known to the Funds or their agents after the NAV has
been calculated on a particular day will not generally be used to
retroactively adjust the price of a security or the NAV determined
earlier that day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Funds may value securities at fair value or
estimate their value as determined in good faith by the Board of
Trustees or persons acting at their direction 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.
Under certain circumstances, the per share NAV of the
Administrative Class shares of the Funds may be lower than the per
share NAV of the Institutional Class shares as a result of the
daily expense accruals of the service and/or distribution fees
paid by Administrative Class shares. Generally, for Funds that pay
income dividends, those dividends are expected to differ over time
by approximately the amount of the expense accrual differential
between the two classes.
Fund Distributions
Each Fund distributes substantially all of its net investment
income to shareholders in the form of dividends. A shareholder
begins earning dividends on Fund shares the day after the Trust
receives the shareholder's purchase payment. Dividends paid by
each Fund with respect to each class of shares are calculated in
the same manner and at the same time, but dividends on
Administrative Class shares are expected to be lower than
dividends on Institutional Class shares as a result of the service
and/or distribution fees applicable to Administrative Class
shares. The following shows when each Fund intends to declare and
distribute income dividends to shareholders of record.
<TABLE>
<CAPTION>
Fund At Least Annually Quarterly
-------------------------------------------------------------------
<S> <C> <C>
Equity Income Fund .
-------------------------------------------------------------------
All other Funds .
-------------------------------------------------------------------
</TABLE>
In addition, each Fund distributes any net capital gains it earns
from the sale of portfolio securities to shareholders no less
frequently than annually. Net short-term capital gains may be paid
more frequently.
A Fund's dividend and capital gain distributions with respect to
a particular class of shares will automatically be reinvested in
additional shares of the same class of the Fund at NAV unless the
shareholder elects to have the distributions paid in cash. A
shareholder may elect to have distributions paid in cash on the
Client Registration Application or by submitting a written
request, signed by the appropriate signatories, indicating the
account number, Fund name(s) and wiring instructions.
Shareholders do not pay any sales charges or other fees
(including Fund Reimbursement Fees) on the receipt of shares
received through the reinvestment of Fund distributions. However,
shareholders of the Structured Emerging Markets and Tax-Efficient
Structured Emerging Markets Funds who receive additional shares
through the reinvestment of distributions will pay a Fund
Reimbursement Fee if they subsequently redeem or exchange those
shares. See "Purchases, Redemptions and Exchanges--Fund
Reimbursement Fees."
For further information on distribution options, please contact
the Trust at 1-800-927-4648.
Prospectus 66
<PAGE>
Tax Consequences
. Taxes on Fund Distributions. A shareholder subject to U.S.
federal income tax will be subject to tax on Fund distributions
whether they are paid in cash or reinvested in additional shares
of the Funds. For federal income tax purposes, Fund distributions
will be taxable to the shareholder as either ordinary income or
capital gains.
Fund dividends (i.e., distributions of investment income) are
taxable to shareholders as ordinary income. Federal taxes on Fund
distributions of gains are determined by how long the Fund owned
the investments that generated the gains, rather than how long the
shareholder owned the shares. Distributions of gains from
investments that a Fund owned for more than 12 months will
generally be taxable to shareholders as capital gains.
Distributions of gains from investments that the Fund owned for 12
months or less will generally be taxable as ordinary income.
Fund distributions are taxable to shareholders even if they are
paid from income or gains earned by a Fund prior to the
shareholder's investment and thus were included in the price paid
for the shares. For example, a shareholder who purchases shares on
or just before the record date of a Fund distribution will pay
full price for the shares and may receive a portion of his or her
investment back as a taxable distribution.
. Taxes on Redemptions or Exchanges of Shares. Any gain
resulting from the sale of Fund shares will generally be subject
to federal income tax. When a shareholder exchanges shares of a
Fund for shares of another series, the transaction generally will
be treated as a sale of the Fund shares for these purposes, and
any gain on those shares will generally be subject to federal
income tax.
. A Note on the Tax-Efficient Equity and Tax-Efficient
Structured Emerging Markets Funds. The Tax-Efficient Equity and
Tax-Efficient Structured Emerging Markets Funds utilize a number
of tax-efficient management techniques designed to minimize
taxable distributions. For instance, the Funds generally seek to
minimize realized gains and, when realizing gains, attempt to
realize gains that will be taxed as capital gains (i.e., as gains
on investments owned for more than 12 months) when distributed to
shareholders. Although the Funds attempt to minimize taxable
distributions, they may be expected to earn and distribute taxable
income and realize and distribute capital gains from time to time.
. A Note on Foreign Investments. A Fund's investment in foreign
securities may be subject to foreign withholding taxes. In that
case, the Fund's yield on those securities would be decreased. In
addition, a Fund's investments in foreign securities or foreign
currencies may increase or accelerate the Fund's recognition of
ordinary income and may affect the timing or amount of the Fund's
distributions. Shareholders of the Global Innovation, Allianz
Select International, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets and International Funds may be
entitled to claim a credit or deduction with respect to foreign
taxes.
This section relates only to federal income tax; the consequences
under other tax laws may differ. Shareholders should consult their
tax advisors as to the possible application of foreign, state and
local income tax laws to Fund dividends and capital distributions.
Please see the Statement of Additional Information for additional
information regarding the tax aspects of investing in the Funds.
PIMCO Funds: Multi-Manager Series
67
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Characteristics and Risks of Securities and Investment Techniques
This section provides additional information about some of the
principal investments and related risks of the Funds identified
under "Summary Information" above. It also describes
characteristics and risks of additional securities and investment
techniques that are not necessarily principal investments or
strategies but may be used by the Funds from time to time. Most of
these securities and investment techniques are discretionary,
which means that the portfolio managers can decide whether to use
them or not. This Prospectus does not attempt to disclose all of
the various types of securities and investment techniques that may
be used by the Funds. As with any mutual fund, investors in the
Funds must rely on the professional investment judgment and skill
of PIMCO Advisors, the Sub-Advisers and the individual portfolio
managers. Please see "Investment Objectives and Policies" in the
Statement of Additional Information for more detailed information
about the securities and investment techniques described in this
section and about other strategies and techniques that may be used
by the Funds.
Fixed Fixed income securities are obligations of the issuer to make
Income payments of principal and/or interest on future dates, and include
Securities corporate and government bonds, notes, certificates of deposit,
and commercial paper, convertible securities and mortgage-backed and
Defensive other asset-backed securities.
Strategies
Aside from the cash management practices described below, the
Mega-Cap, Capital Appreciation, Mid-Cap, Micro-Cap, Enhanced
Equity and Tax-Efficient Equity Funds intend to be as fully
invested in common stocks as practicable at all times. The
Structured Emerging Markets and Tax-Efficient Structured Emerging
Markets Funds normally invest substantially all of their assets in
common stocks and other equity and equity-linked securities, but
may invest up to 5% of their assets in fixed income securities of
emerging market issuers. For cash management purposes, each of
these Funds may maintain a portion of its assets (normally not
more than 10%) in U.S. Government securities, high quality fixed
income securities, money market obligations and cash to pay
certain Fund expenses and to meet redemption requests. None of the
Funds listed in this paragraph will make defensive investments in
response to unfavorable market and other conditions and therefore
may be particularly vulnerable to general declines in stock prices
and/or other categories of securities in which they invest.
Under normal circumstances, the Small-Cap Value Fund intends to
be fully invested in common stocks (aside from cash management
practices), except that the Fund may temporarily hold up to 10% of
its assets in cash and cash equivalents for defensive purposes in
response to unfavorable market and other conditions. The Equity
Income, Value, Renaissance, Growth, Select Growth, Target,
Opportunity, Innovation, Global Innovation, Allianz Select
International and International Funds will each invest primarily
in common stocks, and may also invest in other kinds of equity
securities, including preferred stocks and securities (including
fixed income securities and warrants) convertible into or
exercisable for common stocks. Each of these Funds may invest a
portion of its assets in fixed income securities. These Funds may
temporarily hold up to 100% of their assets in short-term U.S.
Government securities and other money market instruments for
defensive purposes in response to unfavorable market and other
conditions. The Growth & Income Fund will invest primarily in
common stocks, but may also invest significant portions of its
assets in preferred stocks, fixed income securities, convertible
securities and real estate investment trusts, or "REITs." The
Growth & Income Fund may temporarily hold up to 100% of its 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 Allianz Select International and
International Funds may also hold up to 100% of their assets in
other domestic fixed income, foreign fixed income and equity
securities principally traded in the U.S., including obligations
issued or guaranteed by a foreign government or its agencies,
authorities or instrumentalities, corporate bonds and
Prospectus 68
<PAGE>
American Depository Receipts, for temporary defensive purposes.
The temporary defensive strategies described in this paragraph
would be inconsistent with the investment objective and principal
investment strategies of each of the noted Funds and may adversely
affect the Fund's ability to achieve its investment objective.
Companies 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 Micro-Cap Fund, in particular, and the
Market Opportunity and Small-Cap Value Funds generally invest primarily
Capitaliza- in smaller companies and are especially sensitive to the risks
tions described below. In addition, the Innovation and Global Innovation
Funds generally have substantial exposure to these risks. The
Target, Growth & Income, Allianz Select International and Mid-Cap
Funds also have significant exposure to these risks because they
invest primarily in companies with medium-sized market
capitalizations, which are smaller and generally less well-known
or seasoned 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.
Initial The Funds, particularly the Global Innovation Fund, may purchase
Public securities in initial public offerings (IPOs). These securities
Offerings 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. At any particular
time or from time to time a Fund may not be able to invest in
securities issued in IPOs, or invest to the extent desired,
because, for example, only a small portion (if any) of the
securities being offered in an IPO may be made available to the
Fund. In addition, under certain market conditions a relatively
small number of companies may issue securities in IPOs. Similarly,
as the number of Funds to which IPO securities are allocated
increases, the number of securities issued to any one Fund may
decrease. The investment performance of a Fund during periods when
it is unable to invest significantly or at all in IPOs may be
lower than during periods when the Fund is able to do so. In
addition, as a Fund increases in size, the impact of IPOs on the
Fund's performance will generally decrease.
69 PIMCO Funds: Multi-Manager Series
<PAGE>
Foreign The Allianz Select International, Structured Emerging Markets,
(non- Tax-Efficient Structured Emerging Markets and International Funds
U.S.) normally invest principally in securities of foreign issuers,
Securities securities traded principally in securities markets outside the
United States and/or securities denominated in foreign currencies
(together, "foreign securities"). The Global Innovation Fund will
invest in the securities of issuers located in at least three
countries (one of which may be the United States). The Equity
Income, Value, Renaissance, Growth & Income, Growth, Target,
Opportunity and Innovation Funds may invest up to 15% of their
respective assets in foreign securities. The Select Growth Fund
may invest up to 25% of its assets in foreign securities. Each of
these Funds may invest without limit in ADRs (defined below). The
Enhanced Equity and Tax-Efficient Equity Funds may invest in
common stocks of foreign issuers if included in the S&P 500 Index.
All of the Funds may invest in American Depository Receipts
(ADRs). In addition, the Equity Income, Value, Renaissance, Growth
& Income, Growth, Select Growth, Target, Opportunity, Innovation,
Global Innovation, Allianz Select International, Structured
Emerging Markets, Tax-Efficient Structured Emerging Markets and
International Funds may invest in European Depository Receipts
(EDRs) and Global Depository Receipts (GDRs). ADRs are dollar-
denominated receipts issued generally by domestic banks and
representing the deposit with the bank of a security of a foreign
issuer, and are publicly traded on exchanges or over-the-counter
in the United States. EDRs are receipts similar to ADRs and are
issued and traded in Europe. GDRs may be offered privately in the
United States and also traded in public or private markets in
other countries.
Investing in foreign securities involves special risks and
considerations not typically associated with investing in U.S.
securities and shareholders should consider carefully the
substantial risks involved for Funds that invest in these
securities. These risks include: differences in accounting,
auditing and financial reporting standards; generally higher
commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory
taxation; adverse changes in investment or exchange control
regulations; and political instability. Individual foreign
economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate
of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. The securities markets, values
of securities, yields and risks associated with foreign securities
markets may change independently of each other. Also, foreign
securities and dividends and interest payable on those securities
may be subject to foreign taxes, including taxes withheld from
payments on those securities. Foreign securities often trade with
less frequency and volume than domestic securities and therefore
may exhibit greater price volatility. Investments in foreign
securities may also involve higher custodial costs than domestic
investments and additional transaction costs with respect to
foreign currency conversions. Changes in foreign exchange rates
also will affect the value of securities denominated or quoted in
foreign currencies.
Emerging Each of the Funds that may invest in foreign securities may invest
Market in securities of issuers based in or that trade principally in
Securities countries with developing (or "emerging market") economies. The
Structured Emerging Markets and Tax-Efficient Structured Emerging
Markets Funds normally invest most of their assets in emerging
market securities. The Global Innovation, Allianz Select
International and International Funds may also invest significant
portions of their assets in emerging market securities. Investing
in emerging market securities imposes risks different from, or
greater than, risks of investing in domestic securities or in
foreign, developed countries. These risks include: smaller market
capitalization of securities markets, which may suffer periods of
relative illiquidity; significant price volatility; restrictions
on foreign investment; and possible repatriation of investment
income and capital. In addition, foreign investors may be required
to register the proceeds of sales, and future economic or
political crises could lead to price controls, forced mergers,
expropriation or confiscatory taxation, seizure, nationalization
or the creation of government monopolies. The currencies of
emerging market countries may experience significant declines
against the U.S. dollar, and devaluation may
Prospectus 70
<PAGE>
occur subsequent to investments in these currencies by a Fund.
Inflation and rapid fluctuations in inflation rates have had, and
may continue to have, negative effects on the economies and
securities markets of certain emerging market countries.
Additional risks of emerging market securities may include:
greater social, economic and political uncertainty and
instability; more substantial governmental involvement in the
economy; less governmental supervision and regulation;
unavailability of currency hedging techniques; companies that are
newly organized and small; differences in auditing and financial
reporting standards, which may result in unavailability of
material information about issuers; and less developed legal
systems. In addition, emerging securities markets may have
different clearance and settlement procedures, which may be unable
to keep pace with the volume of securities transactions or
otherwise make it difficult to engage in such transactions.
Settlement problems may cause a Fund to miss attractive investment
opportunities, hold a portion of its assets in cash pending
investment, or be delayed in disposing of a portfolio security.
Such a delay could result in possible liability to a purchaser of
the security.
Special Risks of Investing in Russian and Other Eastern European
Securities. Each of the Global Innovation, Allianz Select
International, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets and International Funds may invest a
significant portion of its assets in securities of issuers located
in Russia and in other Eastern European countries. While
investments in securities of such issuers are subject generally to
the same risks associated with investments in other emerging
market countries described above, the political, legal and
operational risks of investing in Russian and other Eastern
European issuers, and of having assets custodied within these
countries, may be particularly acute. A risk of particular note
with respect to direct investment in Russian securities is the way
in which ownership of shares of companies is normally recorded.
When a Fund invests in a Russian issuer, it will normally receive
a "share extract," but that extract is not legally determinative
of ownership. The official record of ownership of a company's
share is maintained by the company's share registrar. Such share
registrars are completely under the control of the issuer, and
investors are provided with few legal rights against such
registrars.
Foreign A Fund that invests directly in foreign currencies or in
Currencies securities that trade in, and receive revenues in, foreign
currencies will be subject to currency risk. The Global
Innovation, Allianz Select International, Structured
Emerging Markets, Tax-Efficient Structured Emerging Markets and
International Funds are particularly sensitive to this risk.
Foreign currency exchange rates may fluctuate significantly over
short periods of time. They generally are determined by supply and
demand and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other
complex factors. Currency exchange rates also can be affected
unpredictably by intervention (or the failure to intervene) by
U.S. or foreign governments or central banks, or by currency
controls or political developments. For example, uncertainty
surrounds the introduction of the euro (a common currency unit for
the European Union) and the effect it may have on the value of
European currencies as well as securities denominated in local
European currencies. The euro 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, Value,
Renaissance, Growth & Income, Growth, Select Growth, Target,
Opportunity, Innovation, Global Innovation, Allianz Select
International, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets and International Funds may enter into
forward foreign currency exchange contracts, primarily to reduce
the risks of adverse changes in foreign exchange rates. In
addition, the Global Innovation, Allianz Select International,
Structured Emerging Markets, Tax-Efficient Structured Emerging
Markets and International Funds may buy and sell foreign currency
futures contracts and options on foreign currencies and foreign
currency futures. A forward foreign currency exchange contract,
71PIMCO Funds: Multi-Manager Series
<PAGE>
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, Allianz Select International, Structured
Emerging Markets, Tax-Efficient Structured Emerging Markets and
International Funds may also enter into these contracts for
purposes of increasing exposure to a foreign currency or to shift
exposure to foreign currency fluctuations from one currency to
another. To the extent that it does so, a Fund will be subject to
the additional risk that the relative value of currencies will be
different than anticipated by the Fund's portfolio manager. The
Global Innovation, Allianz Select International, Structured
Emerging Markets, Tax-Efficient Structured Emerging Markets and
International Funds may use one currency (or basket of currencies)
to hedge against adverse changes in the value of another currency
(or basket of currencies) when exchange rates between the two
currencies are positively correlated. 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
to cover its obligations under forward foreign currency exchange
contracts entered into for non-hedging purposes.
Corporate Each Fund that may invest in fixed income securities may invest in
Debt corporate debt securities. The Growth & Income Fund may invest up
Securities to 10% of its assets in these securities. Corporate debt
securities are subject to the risk of the issuer's inability to
meet principal and interest payments on the obligation and may
also be subject to price volatility due to factors such as
interest rate sensitivity, market perception of the
creditworthiness of the issuer and general market liquidity. When
interest rates rise, the value of corporate debt securities can be
expected to decline. Debt securities with longer durations tend to
be more sensitive to interest rate movements than those with
shorter durations.
Convertible Each Fund may invest in convertible securities. The Growth &
Securities Income Fund may place particular emphasis on convertible
securities. Convertible 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 Mega-Cap, Capital Appreciation, Mid-Cap,
Micro-Cap and Small-Cap Value Funds) may, but is not required to,
use a number of derivative instruments for risk management
purposes or as part of its investment strategies. Generally,
derivatives are financial contracts whose value depends upon, or
is derived
from, the value of an underlying asset, reference rate or index,
and may relate to stocks, bonds, interest rates, currencies or
currency exchange rates, commodities, and related indexes. A
portfolio manager may decide not to employ any of these strategies
and there is no assurance that any derivatives strategy used by a
Fund will
Prospectus 72
<PAGE>
succeed. In addition, 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.
Examples of derivative instruments include options contracts,
futures contracts, options on futures contracts and swap
agreements. The Equity Income, Value, Renaissance, Growth &
Income, Growth, Select Growth, Target, Opportunity, Innovation,
Global Innovation, Allianz Select International, Tax-Efficient
Equity, Structured Emerging Markets, Tax-Efficient Structured
Emerging Markets and International Funds may purchase and sell
(write) call and put options on securities, securities indexes and
foreign currencies. Each of these Funds may purchase and sell
futures contracts and options thereon with respect to securities,
securities indexes and foreign currencies. The Enhanced Equity
Fund may purchase and write options on securities indexes and
enter into securities index futures contracts and options on
securities index futures contracts. The Global Innovation, Allianz
Select International, Tax-Efficient Equity, Structured Emerging
Markets and Tax-Efficient Structured Emerging Markets may enter
into swap agreements with respect to securities indexes. A
description of these and other derivative instruments that the
Funds may use are described under "Investment Objectives and
Policies" in the Statement of Additional Information.
A Fund's use of derivative instruments involves risks different
from, or greater than, the risks associated with investing
directly in securities and other more traditional investments. A
description of various risks associated with particular derivative
instruments is included in "Investment Objectives and Policies" in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
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.
73PIMCO Funds: Multi-Manager Series
<PAGE>
Market and Other Risks Like most other investments, derivative
instruments are subject to the risk that the market value of the
instrument will change in a way detrimental to a Fund's interest.
If a portfolio manager incorrectly forecasts the values of
securities, currencies or interest rates or other economic factors
in using derivatives for a Fund, the Fund might have been in a
better position if it had not entered into the transaction at all.
While some strategies involving derivative instruments can reduce
the risk of loss, they can also reduce the opportunity for gain or
even result in losses by offsetting favorable price movements in
other Fund investments. A Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to a Fund. Also, the value of
derivatives may not correlate perfectly, or at all, with the value
of the assets, reference rates or indexes they are designed to
closely track. In addition, a Fund's use of derivatives may cause
the Fund to realize higher amounts of short-term capital gains
(taxed at ordinary income tax rates when distributed to
shareholders who are individuals) than if the Fund had not used
such instruments.
Equity- The Funds may invest in equity-linked securities. Each of the
Linked Allianz Select International, Structured Emerging Markets and Tax-
Securities Efficient Structured Emerging Markets Funds may invest up to 15%
of its assets in equity-linked securities. The International Fund
may invest up to 5% of its assets in equity-linked securities.
Equity-linked securities are privately issued securities whose
investment results are designed to correspond generally to the
performance of a specified stock index or "basket" of stocks, or
sometimes a single stock. To the extent that a Fund invests in
equity-linked securities whose return corresponds to the
performance of a foreign securities index or one or more of
foreign stocks, investing in equity-linked securities will involve
risks similar to the risks of investing in foreign equity
securities. See "Foreign Securities" above. In addition, an
investing Fund bears the risk that the issuer of an equity-linked
security may default on its obligations under the security.
Equity-linked securities may be considered illiquid and thus
subject to the Funds' restrictions on investments in illiquid
securities.
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.
High Securities rated lower than Baa by Moody's or lower than BBB by
Yield S&P are sometimes referred to as "high yield securities" or "junk
Securities bonds." The Funds, particularly the Growth & Income Fund, may
invest in these securities. Investing in these securities involves
special risks in addition to the risks associated with investments
in higher-rated
Prospectus 74
<PAGE>
fixed income securities. While offering a greater potential
opportunity for capital appreciation and higher yields, these
securities typically may be subject to greater levels of interest
rate, credit and liquidity risk, may entail greater potential
price volatility and may be less liquid than higher-rated
securities. These securities may be regarded as predominately
speculative with respect to the issuer's continuing ability to
meet principal and interest payments. They may also be more
susceptible to real or perceived adverse economic and competitive
industry conditions than higher-rated securities.
Loans of For the purpose of achieving income, each Fund may lend its
Portfolio portfolio securities to brokers, dealers, and other financial
Securities institutions provided a number of conditions are satisfied,
including that the loan is fully collateralized. Please see
"Investment Objectives and Policies" in the Statement of
Additional Information for details. When a Fund lends portfolio
securities, its investment performance will continue to reflect
changes in the value of the securities loaned, and the Fund will
also receive a fee or interest on the collateral. Securities
lending involves the risk of loss of rights in the collateral or
delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. A Fund may pay
lending fees to the party arranging the loan.
Short Each Fund may make short sales as part of its overall portfolio
Sales management strategies or to offset a potential decline in the
value of a security. A short sale involves the sale of a security
that is borrowed from a broker or other institution to complete
the sale. A Fund may only enter into short selling transactions if
the security sold short is held in the Fund's portfolio or if the
Fund has the right to acquire the security without the payment of
further consideration. For these purposes, a Fund may also hold or
have the right to acquire securities which, without the payment of
any further consideration, are convertible into or exchangeable
for the securities sold short. Short sales expose a Fund to the
risk that it will be required to acquire, convert or exchange
securities to replace the borrowed securities (also known as
"covering" the short position) at a time when the securities sold
short have appreciated in value, thus resulting in a loss to the
Fund.
When- Each Fund may purchase securities which it is eligible to purchase
Issued, on a when-issued basis, may purchase and sell such securities for
Delayed delayed delivery and may make contracts to purchase such
Delivery securities for a fixed price at a future date beyond normal
and settlement time (forward commitments). When-issued transactions,
Forward delayed delivery purchases and forward commitments involve a risk
Commitment of loss if the value of the securities declines prior to the
Transactionssettlement date. This risk is in addition to the risk that the
Fund's other assets will decline in value. Therefore, these
transactions may result in a form of leverage and increase a
Fund's overall investment exposure. Typically, no income accrues
on securities a Fund has committed to purchase prior to the time
delivery of the securities is made, although a Fund may earn
income on securities it has segregated to cover these positions.
Repurchase Each Fund may enter into repurchase agreements, in which the Fund
Agreements purchases a security from a bank or broker-dealer that agrees to
repurchase the security at the Fund's cost plus interest within a
specified time. If the party agreeing to repurchase should
default, the Fund will seek to sell the securities which it holds.
This could involve procedural costs or delays in addition to a
loss on the securities if their value should fall below their
repurchase price. Those Funds whose investment objectives do not
include the earning of income will invest in repurchase agreements
only as a cash management technique with respect to that portion
of its portfolio maintained in cash. Repurchase agreements
maturing in more than seven days are considered illiquid
securities.
Reverse
Repurchase
Agreements
and Other
Borrowings
Each Fund may enter into reverse repurchase agreements, subject to
the Fund's limitations on borrowings. A reverse repurchase
agreement involves the sale of a security by a Fund and its
agreement to repurchase the instrument at a specified time and
price, and may be considered a form of borrowing for some
purposes. A Fund will segregate assets determined to be liquid by
PIMCO Advisors or a Sub-Adviser in accordance with procedures
established by the Board of Trustees to cover its obligations
under reverse repurchase agreements.
75PIMCO Funds: Multi-Manager Series
<PAGE>
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 the
Fund, and transactions in illiquid securities may entail
registration expenses and other transaction costs that are higher
than those for transactions in liquid securities. The term
"illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of
business at approximately the amount at which a Fund has valued
the securities. Please see "Investment Objectives and Policies" in
the Statement of Additional Information for a listing of various
securities that are generally considered to be illiquid for these
purposes. Restricted securities, i.e., securities subject to legal
or contractual restrictions on resale, may be illiquid. However,
some restricted securities (such as securities issued pursuant to
Rule 144A under the Securities Act of 1933 and certain commercial
paper) may be treated as liquid, although they may be less liquid
than registered securities traded on established secondary
markets.
Investment The Allianz Select International and International Funds may
in Other invest up to 10% of their assets in securities of other investment
Investment companies, such as closed-end management investment companies, or
Companies in pooled accounts or other investment vehicles which invest in
foreign markets. Each of the other Funds may invest up to 5% of
its assets in other investment companies. As a shareholder of an
investment company, a Fund may indirectly bear service and other
fees which are in addition to the fees the Fund pays its service
providers.
Portfolio With the exception of the Tax-Efficient Equity and Tax-Efficient
Turnover Structured Emerging Markets Funds, the length of time a Fund has
held a particular security is not generally a consideration in
investment decisions. A change in the securities held by a Fund is
known as "portfolio turnover." Each Fund may engage in active and
frequent trading of portfolio securities to achieve its investment
objective and principal investment strategies, particularly during
periods of volatile market movements, although the Tax-Efficient
Equity and Tax-Efficient Structured Emerging Markets Funds will
generally attempt to limit portfolio turnover as part of their
tax-efficient management strategies. High portfolio turnover
(e.g., over 100%) involves correspondingly greater expenses to a
Fund, including brokerage commissions or dealer mark-ups and other
transaction costs on the sale of securities and reinvestments in
other securities. Such sales may also result in realization of
taxable capital gains, including short-term capital gains (which
are taxed at ordinary income tax rates when distributed to
shareholders who are individuals). The trading costs and tax
effects associated with portfolio turnover may adversely affect a
Fund's performance. Funds, such as the Growth & Income, Select
Growth and Allianz Select International Funds, that have recently
changed Sub-Advisers and/or investment objectives and policies may
experience increased portfolio turnover due to the differences
between the Funds' previous and current investment objectives and
policies and portfolio management strategies.
Changes The investment objective of each of the Renaissance, Growth &
in Income, Growth, Select Growth, Target, Opportunity, Innovation,
Investment Global Innovation, Allianz Select International, Mega-Cap, Tax-
Objectives Efficient Equity, Tax-Efficient Structured Emerging Markets and
and International Funds described in this Prospectus may be changed by
Policies the Board of Trustees without shareholder approval. The investment
objective of each other Fund is fundamental and may not be changed
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.
Prospectus 76
<PAGE>
New and In addition to the risks described under "Summary of Principal
Smaller- Risks" above and in this section, several of the Funds are newly
Sized formed and therefore have limited or no performance history for
Funds investors to evaluate. Also, it is possible that newer Funds and
smaller-sized Funds may invest in securities offered in initial
public offerings and other types of transactions (such as private
placements) which, because of the Funds' size, may have a
disproportionate impact on the Funds' performance results. The
Funds would not necessarily have achieved the same performance
results if their 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.
77PIMCO Funds: Multi-Manager Series
<PAGE>
(This page left blank intentionally)
Prospectus
78
<PAGE>
Financial Highlights
The financial highlights table is intended to help a shareholder
understand the financial performance of Institutional and
Administrative Class shares of each Fund for the past 5 years or,
if the class is less than 5 years old, since the class of shares
was first offered. Certain information reflects financial results
for a single Fund share. The total returns in the table represent
the rate that an investor would have earned or lost on an
investment in a particular class of shares of a Fund, assuming
reinvestment of all dividends and distributions. This information
has been audited by PricewaterhouseCoopers LLP, whose report,
along with each Fund's financial statements, are included in the
Trust's annual report to shareholders. The annual report is
incorporated by reference in the Statement of Additional
Information and is available free of charge upon request from the
Distributor.
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Dividends in Distributions
Year or Value Net Unrealized Income from from Net Excess of Net from Net
Period Beginning Investment Gain (Loss) on Investment Investment Investment Realized
Ended of Period Income (Loss) Investments Operations Income Income Capital Gains
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Equity Income Fund (i)
Institutional Class
06/30/00 $15.62 $ 0.39 (a) $(2.44)(a) $(2.05) $(0.39) $0.00 $(0.48)
06/30/99 16.09 0.44 (a) 1.28 (a) 1.72 (0.43) 0.00 (1.76)
06/30/98 15.41 0.44 (a) 2.75 (a) 3.19 (0.42) 0.00 (2.09)
06/30/97 14.36 0.40 3.17 3.57 (0.55) 0.00 (1.97)
11/01/95-06/30/96 13.09 0.78 1.31 2.09 (0.34) 0.00 (0.48)
Administrative Class
06/30/00 15.61 0.37 (a) (2.46)(a) (2.09) (0.33) 0.00 (0.48)
06/30/99 16.08 0.41 (a) 1.28 (a) 1.69 (0.40) 0.00 (1.76)
06/30/98 15.40 0.40 (a) 2.75 (a) 3.15 (0.38) 0.00 (2.09)
06/30/97 14.35 0.27 3.26 3.53 (0.51) 0.00 (1.97)
11/01/95-06/30/96 13.13 0.75 1.31 2.06 (0.36) 0.00 (0.48)
Value Fund (i)
Institutional Class
06/30/00 $15.30 $ 0.28 (a) $(1.33)(a) $(1.05) $(0.26) $0.00 $(0.57)
06/30/99 15.66 0.28 (a) 1.36 (a) 1.64 (0.28) 0.00 (1.72)
06/30/98 14.81 0.25 (a) 2.47 (a) 2.72 (0.24) 0.00 (1.63)
06/30/97 12.46 1.05 2.11 3.16 (0.31) 0.00 (0.50)
11/01/95-06/30/96 12.53 0.25 1.62 1.87 (0.17) 0.00 (1.77)
Administrative Class
06/30/00 15.26 0.24 (a) (1.33)(a) (1.09) (0.25) 0.00 (0.57)
06/30/99 15.65 0.26 (a) 1.32 (a) 1.58 (0.25) 0.00 (1.72)
08/21/97-06/30/98 15.66 0.19 (a) 1.65 (a) 1.84 (0.22) 0.00 (1.63)
Renaissance Fund (ii)
Institutional Class
06/30/00 $18.23 $ 0.42 (a) $(0.23)(a) $ 0.19 $ 0.00 $0.00 $(2.59)
06/30/99 19.07 0.06 (a) 1.43 (a) 1.49 0.00 0.00 (2.33)
12/30/97-06/30/98 16.73 0.05 2.29 2.34 0.00 0.00 0.00
Administrative Class
06/30/00 18.18 0.11 (a) 0.09 (a) 0.20 0.00 0.00 (2.59)
08/31/98-06/30/99 15.37 0.02 (a) 5.12 (a) 5.14 0.00 0.00 (2.33)
Growth & Income Fund
(ii)
Institutional Class
06/30/00 $15.84 $(0.07)(a) $ 5.81 (a) $ 5.74 $ 0.00 $0.00 $(8.18)
06/30/99 13.53 (0.03)(a) 2.99 (a) 2.96 0.00 0.00 (0.65)
06/30/98 14.04 (0.03)(a) 3.61 (a) 3.58 0.00 0.00 (4.09)
06/30/97 14.66 (0.06)(a) 1.31 (a) 1.25 0.00 0.00 (1.87)
11/01/95-06/30/96 12.92 0.49 1.62 2.11 0.00 0.00 (0.37)
Administrative Class
07/01/98-05/27/99(b) 13.50 (0.05)(a) 1.71 (a) 1.66 0.00 0.00 (0.65)
08/21/97-06/30/98 15.27 (0.05)(a) 2.37 (a) 2.32 0.00 0.00 (4.09)
Growth Fund (ii)
Institutional Class
06/30/00 $31.24 $(0.14)(a) $ 9.73 (a) $ 9.59 $ 0.00 $0.00 $(5.66)
03/31/99-06/30/99 31.27 (0.01)(a) (0.02)(a) (0.03) 0.00 0.00 0.00
Administrative Class
06/30/00 31.23 (0.21)(a) 9.59 (a) 9.38 0.00 0.00 (5.66)
03/31/99-06/30/99 31.27 (0.04)(a) 0.00 (a) (0.04) 0.00 0.00 0.00
</TABLE>
-------
* Annualized
(a) Per share amounts based on average number of shares outstanding during
the period.
(b) All Administrative Class shares of the Growth & Income Fund were redeemed
on May 27, 1999.
(i) The information provided for the Equity Income and Value Funds reflects
the results of operations under the Funds' former Sub-Adviser through
May 8, 2000; the Funds would not necessarily have achieved the results
shown above under their current investment management arrangements.
(ii) The information provided for the Renaissance, Growth & Income and Growth
Funds reflects results of operations under the Funds' former Sub-Adviser
through May 7, June 30, and March 6, 1999, respectively; the Funds would
not necessarily have achieved the performance results shown above under
their current investment management arrangements. The Growth & Income
Fund (formerly the Mid-Cap Equity Fund) changed its investment objective
and policies on August 1, 2000; the performance results shown above
would not necessarily have been achieved had the Fund's current
objective and policies been in effect during the periods shown.
79 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Fund Ratio of Net
Distributions Reimbursement Ratio of Investment
in Excess of Tax Basis Fee Added To Net Asset Net Assets Expenses to Income (Loss)
Net Realized Return of Total Paid-In- Value End End of Average Net to Average Portfolio
Capital Gains Capital Distributions Capital of Period Total Return Period (000s) Assets Net Assets Turnover Rate
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$(2.16) $0.00 $(3.03) $ 0.00 $10.54 (12.83)% $ 28,812 0.72% 3.21% 114%
0.00 0.00 (2.19) 0.00 15.62 12.56 123,012 0.71 3.00 76
0.00 0.00 (2.51) 0.00 16.09 21.84 138,650 0.71 2.71 45
0.00 0.00 (2.52) 0.00 15.41 27.67 121,138 0.72 3.03 45
0.00 0.00 (0.82) 0.00 14.36 16.35 116,714 0.70* 3.41* 52
(2.16) 0.00 (2.97) 0.00 10.55 (13.17) 2,827 0.97 3.00 114%
0.00 0.00 (2.16) 0.00 15.61 12.31 13,797 0.96 2.80 76
0.00 0.00 (2.47) 0.00 16.08 21.58 11,699 0.96 2.45 45
0.00 0.00 (2.48) 0.00 15.40 27.40 8,145 0.97 2.79 45
0.00 0.00 (0.84) 0.00 14.35 16.08 6,097 0.95* 3.19* 52
$(2.00) $0.00 $(2.83) $ 0.00 $11.42 (6.65)% $ 41,996 0.70% 2.18% 196%
0.00 0.00 (2.00) 0.00 15.30 12.30 69,181 0.71 1.99 101
0.00 0.00 (1.87) 0.00 15.66 19.35 83,219 0.71 1.59 77
0.00 0.00 (0.81) 0.00 14.81 26.38 74,613 0.73 2.02 71
0.00 0.00 (1.94) 0.00 12.46 16.24 52,727 0.70* 2.40* 29
(2.00) 0.00 (2.82) 0.00 11.35 (7.00) 24,380 0.96 1.97 196%
0.00 0.00 (1.97) 0.00 15.26 11.91 23,164 0.95 1.81 101
0.00 0.00 (1.85) 0.00 15.65 12.71 10,349 0.96* 1.40* 77
$(0.86) $0.00 $(3.45) $ 0.00 $14.97 3.30 % $ 6,394 0.85% 2.73% 133%
0.00 0.00 (2.33) 0.00 18.23 10.24 136 0.86 0.38 221
0.00 0.00 0.00 0.00 19.07 13.99 851 0.86* 0.55* 192
(0.86) 0.00 (3.45) 0.00 14.93 3.36 953 1.10 0.71 133
0.00 0.00 (2.33) 0.00 18.18 36.41 427 1.09* 0.13* 221
$(0.42) $0.00 $(8.60) $ 0.00 $12.98 49.32% $ 4,914 1.03%(c) (0.46)% 195%
0.00 0.00 (0.65) 0.00 15.84 23.18 7,399 0.89 (0.22) 273
0.00 0.00 (4.09) 0.00 13.53 30.40 8,488 0.89 (0.25) 268
0.00 0.00 (1.87) 0.00 14.04 9.61 7,591 1.15 (0.43) 202
0.00 0.00 (0.37) 0.00 14.66 16.72 8,378 0.88* (0.32)* 97
0.00 0.00 (0.65) 0.00 14.51 13.12 0 1.14* (0.45)* 273
0.00 0.00 (4.09) 0.00 13.50 19.65 2,371 1.13* (0.49)* 268
$ 0.00 $0.00 $(5.66) $ 0.00 $35.17 32.66 % $ 17,533 0.77% (0.39)% 72%
0.00 0.00 0.00 0.00 31.24 (0.10) 948 0.74* (0.19)* 131
0.00 0.00 (5.66) 0.00 34.95 31.92 15,116 1.02 (0.63) 72
0.00 0.00 0.00 0.00 31.23 (0.13) 6,164 0.97* (0.53)* 131
</TABLE>
-------
(c) Ratio of expenses to average net assets excluding interest expense is
0.88%.
Prospectus
80
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Dividends in Distributions
Year or Value Net Unrealized Income from from Net Excess of Net from Net
Period Beginning Investment Gain (Loss) on Investment Investment Investment Realized
Ended of Period Income (Loss) Investments Operations Income Income Capital Gains
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Select Growth Fund (iii)
Institutional Class
06/30/00 $24.86 $ 0.05 (a) $ 2.86 (a) $ 2.91 $(0.02) $ 0.00 $(3.72)
06/30/99 20.39 (0.04)(a) 5.24 (a) 5.20 0.00 0.00 (0.73)
06/30/98 15.55 0.03 (a) 6.11 (a) 6.14 0.00 0.00 (1.30)
06/30/97 13.55 0.03 (a) 2.78 (a) 2.81 (0.02) 0.00 (0.79)
11/01/95-06/30/96 12.72 0.51 0.65 1.16 (0.04) (0.01) (0.28)
Administrative Class
06/30/00 $24.67 $ 0.01 (a) $ 2.76 (a) $ 2.75 $(0.03) $ 0.00 $(3.72)
06/30/99 20.32 (0.03)(a) 5.11 (a) 5.08 0.00 0.00 (0.73)
06/30/98 15.53 (0.01)(a) 6.10 (a) 6.09 0.00 0.00 (1.30)
06/30/97 13.56 0.00 (a) 2.77 (a) 2.77 (0.01) 0.00 (0.79)
11/01/95-06/30/96 12.73 0.49 0.65 1.14 (0.02) (0.01) (0.28)
Target Fund (iv)
Institutional Class
06/30/00 $17.74 $ (0.14)(a) $ 15.30 (a) $15.16 $ 0.00 $ 0.00 $(1.80)
03/31/99-06/30/99 16.34 (0.02)(a) 1.42 (a) 1.40 0.00 0.00 0.00
Administrative Class
06/30/00 17.73 (0.19)(a) 15.55 (a) 15.36 0.00 0.00 (1.80)
03/31/99-06/30/99 16.34 (0.03)(a) 1.42 (a) 1.39 0.00 0.00 0.00
Opportunity Fund (iv)
Institutional Class
06/30/00 $24.26 $(0.12)(a) $ 11.17 (a) $11.05 $ 0.00 $ 0.00 $(7.88)
03/31/99-06/30/99 21.40 (0.03)(a) 2.89 (a) 2.86 0.00 0.00 0.00
Administrative Class
06/30/00 24.26 (0.18)(a) 11.24 (a) 11.06 0.00 0.00 (7.88)
03/31/99-06/30/99 21.40 (0.05)(a) 2.91 (a) 2.86 0.00 0.00 0.00
Innovation Fund (iv)
Institutional Class
06/30/00 $37.50 $(0.37)(a) $ 41.80 (a) $41.43 $ 0.00 $ 0.00 $(6.39)
03/05/99-06/30/99 32.73 (0.05)(a) 4.82 (a) 4.77 0.00 0.00 0.00
Administrative Class
03/31/00-06/30/00 99.70 (0.20)(a) (27.17)(a) (27.37) 0.00 0.00 0.00
Global Innovation Fund
Institutional Class
03/31/00-06/30/00 $20.17 $(0.01)(a) $ (1.20)(a) $(1.21) $ 0.00 $ 0.00 $ 0.00
</TABLE>
-------
* Annualized
(a) Per share amounts based on average number of shares outstanding during
the period.
(iii) Formerly the PIMCO Core Equity Fund. The Fund changed its investment
objective and policies on April 1, 2000; the performance results shown
above would not necessarily have been achieved had the Fund's current
objective and policies been in effect during the periods shown. In
addition, the performance results shown above reflect the Fund's
advisory fee level in effect prior to April 1, 2000; these results would
have been lower had the Fund's current advisory fee level then been in
effect. This information also reflects the results of operations under
the Fund's former Sub-Adviser through June 30, 1999; the Fund would not
necessarily have achieved the performance results shown above under its
current investment management arrangements.
(iv) The information provided for the Target, Opportunity and Innovation Funds
reflects results of operations under the Funds' former Sub-Adviser
through March 6, 1999; the Funds would not necessarily have achieved the
performance results shown above under their current investment management
arrangements.
81 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Fund Ratio of Net
Distributions Reimbursement Ratio of Investment
in Excess of Tax Basis Fee Added to Net Asset Net Assets Expenses to Income (Loss)
Net Realized Return of Total Paid-In- Value End End of Average Net to Average
Capital Gains Capital Distributions Capital of Period Total Return Period (000s) Assets Net Assets
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $(0.01) $ (3.75) $ 0.00 $ 24.02 13.11% $ 2,613 0.94%(b) 0.20%
0.00 0.00 (0.73) 0.00 24.86 26.34 1,184 1.01 (0.20)
0.00 0.00 (1.30) 0.00 20.39 41.83 1,915 0.83 0.20
0.00 0.00 (0.81) 0.00 15.55 21.59 6,444 0.87 0.23
0.00 0.00 (0.33) 0.00 13.55 9.41 10,452 0.82* 0.53*
$ 0.00 $(0.01) $ (3.76) $ 0.00 $ 23.66 12.54% $ 49 1.18%(c) (0.05)%
0.00 0.00 (0.73) 0.00 24.67 25.84 15 1.08 (0.17)
0.00 0.00 (1.30) 0.00 20.32 41.54 128,666 1.08 (0.07)
0.00 0.00 (0.80) 0.00 15.53 21.20 29,332 1.13 (0.03)
0.00 0.00 (0.31) 0.00 13.56 9.23 33,575 1.07* 0.28 *
$ 0.00 $ 0.00 $ (1.80) $ 0.00 $ 31.10 89.85% $ 18,436 0.81% (0.50)%
0.00 0.00 0.00 0.00 17.74 8.57 1,298 0.79* (0.39)*
0.00 0.00 (1.80) 0.00 31.29 91.13 6,699 1.06 (0.78)
0.00 0.00 0.00 0.00 17.73 8.51 5,513 1.02* (0.61)*
$ 0.00 $ 0.00 $ (7.88) $ 0.00 $ 27.43 50.24% $ 39,205 0.91% (0.42)%
0.00 0.00 0.00 0.00 24.26 13.36 417 0.88* (0.54)*
0.00 0.00 (7.88) 0.00 27.44 50.36 8,486 1.16 (0.67)
0.00 0.00 0.00 0.00 24.26 13.36 2,010 1.12* (0.82)*
$ 0.00 $ 0.00 $ (6.39) $ 0.00 $ 72.54 115.34% $ 28,334 0.90% (0.52)%
0.00 0.00 0.00 0.00 37.50 14.57 444 0.88* (0.15)
0.00 0.00 0.00 0.00 72.33 (27.45) 668 1.15* (0.92)*
$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 18.96 (6.00)% $ 403 1.40%(d)* (0.25)%*
<CAPTION>
Portfolio
Turnover Rate
-------------------------------------------------------------------------------------------------------
<C>
170%
95
120
139
73
170%
95
120
139
73
99%
229
99
229
254%
175
254
175
186%
119
186
131%
</TABLE>
-------
(b) Ratio of expenses to average net assets excluding interest expense is
0.83%.
(c) Ratio of expenses to average net assets excluding interest expense is
1.08%.
(d) If the investment manager had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 1.47% for the
period ended June 30, 2000.
Prospectus 82
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Dividends in Distributions
Year or Value Net Unrealized Income from from Net Excess of Net from Net
Period Beginning Investment Gain (Loss) on Investment Investment Investment Realized
Ended of Period Income (Loss) Investments Operations Income Income Capital Gains
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Allianz Select
International Fund (v)
Institutional Class
06/30/00 $16.04 $(0.05)(a) $8.90 (a) $8.85 $ 0.00 $ 0.00 $(4.43)
06/30/99 13.55 (0.02)(a) 3.56 (a) 3.54 (0.02) 0.00 (1.03)
12/31/97-06/30/98 10.00 0.00 (a) 3.55 (a) 3.55 0.00 0.00 0.00
Mega-Cap Fund
Institutional Class
08/31/99-06/30/00 $10.00 $ 0.00 (a) $3.35 (a) $3.35 $ 0.00 $ 0.00 $ 0.00
Capital Appreciation
Fund
Institutional Class
06/30/00 $26.84 $ 0.08 (a) $5.29 (a) $5.37 $(0.07) $(0.04) $(5.00)
06/30/99 26.13 0.16 (a) 2.35 (a) 2.51 (0.15) 0.00 (1.65)
06/30/98 21.19 0.15 (a) 6.59 (a) 6.74 (0.12) 0.00 (1.68)
06/30/97 18.10 0.24 5.08 5.32 (0.10) 0.00 (2.13)
11/01/95-06/30/96 16.94 0.35 1.99 2.34 (0.15) 0.00 (1.03)
Administrative Class
06/30/00 26.64 0.01 (a) 5.25 (a) 5.26 (0.03) (0.02) (5.00)
06/30/99 25.99 0.09 (a) 2.34 (a) 2.43 (0.13) 0.00 (1.65)
06/30/98 21.16 0.10 (a) 6.55 (a) 6.65 (0.14) 0.00 (1.68)
07/31/96-06/30/97 17.19 0.16 6.03 6.19 (0.09) 0.00 (2.13)
Mid-Cap Fund (vi)
Institutional Class
06/30/00 $23.01 $ 0.09 (a) $7.91 (a) $8.00 $(0.07) $(0.04) $(0.02)
06/30/99 24.09 0.12 (a) (0.11)(a) 0.01 (0.02) 0.00 (1.07)
06/30/98 20.28 0.11 (a) 5.11 (a) 5.22 (0.07) (0.01) (1.33)
06/30/97 19.44 (0.07) 5.25 5.18 (0.05) 0.00 (4.29)
11/01/95-06/30/96 18.16 0.32 1.53 1.85 (0.14) 0.00 (0.43)
Administrative Class
06/30/00 22.88 0.03 (a) 7.86 (a) 7.89 (0.03) (0.02) (0.02)
06/30/99 23.96 0.06 (a) (0.06)(a) 0.00 (0.01) 0.00 (1.07)
06/30/98 20.24 0.05 (a) 5.08 (a) 5.13 (0.07) (0.01) (1.33)
06/30/97 19.44 (0.13) 5.25 5.12 (0.03) 0.00 (4.29)
11/01/95-06/30/96 18.17 0.28 1.53 1.81 (0.11) 0.00 (0.43)
Micro-Cap Fund (vii)
Institutional Class
06/30/00 $20.00 $ (0.19)(a) $5.31 (a) $5.12 $ 0.00 $ 0.00 $ 0.00
06/30/99 23.66 (0.14)(a) (2.89)(a) (3.03) 0.00 0.00 0.00
06/30/98 19.85 (0.11)(a) 6.54 (a) 6.43 0.00 0.00 (2.62)
06/30/97 18.47 0.00 3.41 3.41 0.00 0.00 (2.03)
11/01/95-06/30/96 15.38 0.00 3.43 3.43 0.00 0.00 (0.34)
Administrative Class
06/30/00 19.82 (0.26)(a) 5.27 (a) 5.01 0.00 0.00 0.00
06/30/99 23.52 (0.19)(a) (2.88)(a) (3.07) 0.00 0.00 0.00
06/30/98 19.78 (0.17)(a) 6.53 (a) 6.36 0.00 0.00 (2.62)
06/30/97 18.46 (0.06) 3.41 3.35 0.00 0.00 (2.03)
04/01/96-06/30/96 16.73 0.03 1.70 1.73 0.00 0.00 0.00
</TABLE>
-------
* Annualized
(a) Per share amounts based on average number of shares outstanding during
the period.
(v) Formerly the International Growth Fund. The information provided for the
Allianz Select International Fund reflects results of operations under the
Fund's former Sub-Advisers through June 30, 2000; the Fund would not
necessarily have achieved the performance results shown above under its
current investment management arrangements. The Fund changed its
investment objective and policies on November 1, 2000; the performance
results shown above would not necessarily have been achieved had the
Fund's current objective and policies been in effect during the periods
shown.
(vi) Formerly the Mid-Cap Growth Fund.
(vii) Formerly the Micro-Cap Growth Fund.
83 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Fund Ratio of Net
Distributions Reimbursement Ratio of Investment
in Excess of Tax Basis Fee Added to Net Asset Net Assets Expenses to Income (Loss)
Net Realized Return of Total Paid-In- Value End End of Average Net to Average
Capital Gains Capital Distributions Capital of Period Total Return Period (000s) Assets Net Assets
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $0.00 $(4.43) $0.00 $20.46 56.28% $ 10,541 1.35% (0.22)%
0.00 0.00 (1.05) 0.00 16.04 28.62 8,408 1.39 (0.15)
0.00 0.00 0.00 0.00 13.55 35.50 6,822 1.36* 0.08*
$ 0.00 $0.00 $ 0.00 $0.00 $13.35 33.54% $ 4,009 0.71%*(b) 0.04%*
$ 0.00 $0.00 $(5.11) $0.00 $27.10 22.79% $372,028 0.71% 0.29%
0.00 0.00 (1.80) 0.00 26.84 10.57 645,967 0.71 0.64
0.00 0.00 (1.80) 0.00 26.13 32.97 805,856 0.71 0.64
0.00 0.00 (2.23) 0.00 21.19 31.52 536,187 0.71 1.02
0.00 0.00 (1.18) 0.00 18.10 14.65 348,728 0.70* 1.33*
0.00 0.00 (5.05) 0.00 26.85 22.49 180,423 0.96 0.04
0.00 0.00 (1.78) 0.00 26.64 10.30 229,831 0.95 0.38
0.00 0.00 (1.82) 0.00 25.99 32.55 132,384 0.96 0.39
0.00 0.00 (2.22) 0.00 21.16 38.26 3,115 0.96* 0.66*
$ 0.00 $0.00 $(0.13) $0.00 $30.88 34.88% $582,715 0.71% 0.35%
0.00 0.00 (1.09) 0.00 23.01 0.33 581,544 0.70 0.54
0.00 0.00 (1.41) 0.00 24.09 26.16 437,985 0.71 0.46
0.00 0.00 (4.34) 0.00 20.28 30.58 291,374 0.71 0.53
0.00 0.00 (0.57) 0.00 19.44 10.37 231,011 0.70* 1.11*
0.00 0.00 (0.07) 0.00 30.70 34.53 142,986 0.96 0.10
0.00 0.00 (1.08) 0.00 22.88 0.31 104,337 0.95 0.30
0.00 0.00 (1.41) 0.00 23.96 25.75 73,614 0.95 0.22
0.00 0.00 (4.32) 0.00 20.24 30.23 2,066 0.96 0.28
0.00 0.00 (0.54) 0.00 19.44 10.17 1,071 0.95* 0.89*
$ 0.00 $0.00 $ 0.00 $0.00 $25.12 25.60 % $231,579 1.51% (0.90)%
(0.63) 0.00 (0.63) 0.00 20.00 (12.66) 234,439 1.50 (0.71)
0.00 0.00 (2.62) 0.00 23.66 33.95 257,842 1.51 (0.50)
0.00 0.00 (2.03) 0.00 19.85 20.05 164,139 1.52 (0.49)
0.00 0.00 (0.34) 0.00 18.47 22.64 83,973 1.50* (0.45)*
0.00 0.00 0.00 0.00 24.83 25.28 7,208 1.76 (1.19)
(0.63) 0.00 (0.63) 0.00 19.82 (12.91) 3,000 1.75 (0.97)
0.00 0.00 (2.62) 0.00 23.52 33.70 4,779 1.76 (0.74)
0.00 0.00 (2.03) 0.00 19.78 19.72 2,116 1.77 (0.74)
0.00 0.00 0.00 0.00 18.46 10.34 566 1.73* (0.74)*
<CAPTION>
Portfolio
Turnover Rate
--------------------------------------------------------------------------------------------------------
<C>
62%
269
60
151%
119%
120
75
87
73
119
120
75
87
164%
85
66
82
79
164
85
66
82
79
85%
73
72
84
54
85
73
72
84
54
</TABLE>
-------
(b) If the investment manager had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 1.26% for the
period ended June 30, 2000.
Prospectus 84
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Dividends in Distributions
Year or Value Net Unrealized Income from from Net Excess of Net from Net
Period Beginning Investment Gain (Loss) on Investment Investment Investment Realized
Ended of Period Income (Loss) Investments Operations Income Income Capital Gains
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Small-Cap Value Fund
Institutional Class
06/30/00 $16.05 $0.37 (a) $(1.82)(a) $(1.45) $(0.34) $0.00 $ 0.00
06/30/99 17.68 0.32 (a) (1.29)(a) (0.97) (0.21) 0.00 0.00
06/30/98 15.78 0.29 (a) 2.50 (a) 2.79 (0.13) 0.00 (0.76)
06/30/97 14.20 0.46 3.63 4.09 (0.13) 0.00 (2.38)
11/01/95-06/30/96 13.10 0.56 1.49 2.05 (0.21) 0.00 (0.74)
Administrative Class
06/30/00 15.97 0.34 (a) (1.81)(a) (1.47) (0.31) 0.00 0.00
06/30/99 17.63 0.29 (a) (1.30)(a) (1.01) (0.20) 0.00 0.00
06/30/98 15.76 0.25 (a) 2.49 (a) 2.74 (0.11) 0.00 (0.76)
06/30/97 14.20 0.38 3.68 4.06 (0.12) 0.00 (2.38)
11/01/95-06/30/96 13.16 0.54 1.43 1.97 (0.19) 0.00 (0.74)
Enhanced Equity Fund
Institutional Class
06/30/00 $12.96 $0.07 (a) $ 0.49 (a) $ 0.56 $(0.07) $0.00 $(0.47)
06/30/99 12.64 0.08 (a) 1.91 (a) 1.99 (0.06) 0.00 (1.61)
06/30/98 16.46 0.11 (a) 3.91 (a) 4.02 (0.11) 0.00 (7.73)
06/30/97 15.91 1.18 3.10 4.28 (0.10) 0.00 (3.63)
11/01/95-06/30/96 14.44 0.34 1.67 2.01 (0.16) 0.00 (0.38)
Administrative Class
06/30/00 12.87 0.03 (a) 0.53 (a) 0.56 (0.05) 0.00 (0.47)
06/30/99 12.59 0.05 (a) 1.90 (a) 1.95 (0.06) 0.00 (1.61)
08/21/97-06/30/98 17.53 0.05 (a) 2.85 (a) 2.90 (0.11) 0.00 (7.73)
Tax-Efficient Equity
Fund
Institutional Class
07/02/99-06/30/00 $11.79 $0.05 (a) $ 0.47 (a) $(0.52) $ 0.00 $0.00 $ 0.00
Administrative Class
06/30/00 11.61 0.02 (a) 0.65 (a) 0.67 0.00 0.00 0.00
09/30/98-06/30/99 8.65 0.03 (a) 2.93 (a) 2.96 0.00 0.00 0.00
Structured Emerging
Markets Fund
Institutional Class
06/30/00 $12.42 $0.05 (a) $ 0.81 (a) $ 0.86 $(0.07) $0.00 $(0.79)
09/30/98-06/30/99 10.00 0.15 (a) 2.57 (a) 2.72 (0.07) 0.00 (0.28)
Tax-Efficient Structured
Emerging Markets Fund
Institutional Class
06/30/00 $13.25 $0.09 (a) $ 0.89 (a) $ 0.98 $(0.12) $0.00 $ 0.00
09/30/98-06/30/99 10.00 0.16 (a) 3.10 (a) 3.26 (0.06) 0.00 0.00
International Fund
Institutional Class
06/30/00 $11.62 $0.08 (a) $ 1.24 (a) $ 1.32 $ 0.00 $0.00 $(1.74)
09/30/98-06/30/99 10.47 0.14 (a) 2.16 (a) 2.30 0.00 0.00 (1.15)
Administrative Class
06/30/00 11.56 0.04 (a) 1.24 (a) 1.28 0.00 0.00 (1.74)
09/30/98-06/30/99 10.47 0.09 (a) 2.15 (a) 2.24 0.00 0.00 (1.15)
</TABLE>
-------
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
85 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Fund Ratio of Net
Distributions Reimbursement Ratio of Investment
in Excess of Tax Basis Fee Added to Net Asset Net Assets Expenses to Income (Loss)
Net Realized Return of Total Paid-In- Value End End of Average Net to Average Portfolio
Capital Gains Capital Distributions Capital of Period Total Return Period (000s) Assets Net Assets Turnover Rate
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$0.00 $0.00 $(0.34) $0.00 $14.26 (8.88)% $30,059 0.86% 2.57% 55%
(0.45) 0.00 (0.66) 0.00 16.05 (5.11) 59,132 0.85 2.12 60
0.00 0.00 (0.89) 0.00 17.68 17.77 47,432 0.85 1.65 41
0.00 0.00 (2.51) 0.00 15.78 31.99 34,639 0.90 1.92 48
0.00 0.00 (0.95) 0.00 14.20 16.35 29,017 0.85* 2.12* 35
0.00 0.00 (0.31) 0.00 14.19 (9.12) 15,313 1.11 2.38 55
(0.45) 0.00 (0.65) 0.00 15.97 (5.40) 21,002 1.10 1.92 60
0.00 0.00 (0.87) 0.00 17.63 17.41 10,751 1.10 1.39 41
0.00 0.00 (2.50) 0.00 15.76 31.70 5,916 1.16 1.68 48
0.00 0.00 (0.93) 0.00 14.20 15.64 4,433 1.10* 1.86* 35
$0.00 $0.00 $(0.54) $0.00 $12.98 4.45 % $20,338 0.71% 0.54% 20%
0.00 0.00 (1.67) 0.00 12.96 17.95 42,619 0.71 0.66 34
0.00 0.00 (7.84) 0.00 12.64 32.33 36,584 0.71 0.63 65
0.00 0.00 (3.73) 0.00 16.46 31.45 44,838 0.74 1.31 91
0.00 0.00 (0.54) 0.00 15.91 14.21 83,425 0.70* 1.58* 53
0.00 0.00 (0.52) 0.00 12.91 4.47 27,954 0.96 0.27 20
0.00 0.00 (1.67) 0.00 12.87 17.63 24,015 0.96 0.41 34
0.00 0.00 (7.84) 0.00 12.59 23.85 10,409 0.95* 0.47* 65
$0.00 $0.00 $ 0.00 $0.00 $12.31 4.41 % $ 1,172 0.71%* 0.42%* 32%
0.00 0.00 0.00 0.00 12.28 5.77 19,953 0.96 0.19 32
0.00 0.00 0.00 0.00 11.61 34.28 3,391 0.92* 0.31* 13
$0.00 $0.00 $(0.86) $0.01(a) $12.43 6.64 % $35,376 1.25%(b) 0.36% 24%
0.00 0.00 (0.35) 0.05(a) 12.42 29.21 46,577 0.95 1.56 30
$0.00 $0.00 $(0.12) $0.03(a) $14.14 7.55 % $86,973 1.00%(b) 0.64% 24%
0.00 0.00 (0.06) 0.05(a) 13.25 33.39 72,509 0.95 1.57 28
$0.00 $0.00 $(1.74) $0.00 $11.20 11.10 % $ 6,463 1.13%(c) 0.66% 58%
0.00 0.00 (1.15) 0.00 11.62 23.07 3,627 1.09* 1.70* 55
0.00 0.00 (1.74) 0.00 11.10 10.78 18,059 1.38(d) 0.34 58
0.00 0.00 (1.15) 0.00 11.56 22.47 15,797 1.34* 1.06* 55
</TABLE>
-------
(b) Ratio of expenses to average net assets excluding tax and interest expense
is 0.95%.
(c) Ratio of expenses to average net assets excluding interest expense is
1.05%.
(d) Ratio of expenses to average net assets excluding interest expense is
1.30%.
Prospectus 86
<PAGE>
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<PAGE>
(This page left blank intentionally)
<PAGE>
(This page left blank intentionally)
<PAGE>
-------------------------------------------------------------------
PIMCO INVESTMENT ADVISER AND ADMINISTRATOR
Funds: PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Multi- 92660
Manager
Series
-------------------------------------------------------------------
CUSTODIAN
State Street Bank & Trust Co., 801 Pennsylvania, Kansas City, MO
64105
-------------------------------------------------------------------
TRANSFER AGENT
National Financial Data Services, 330 W. 9th Street, 4th Floor,
Kansas City, MO 64105
-------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
-------------------------------------------------------------------
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
-------------------------------------------------------------------
<PAGE>
The Trust's Statement of Additional Information ("SAI") and annual and
semi-annual reports to shareholders include additional information about the
Funds. The SAI and the financial statements included in the Funds' most recent
annual report to shareholders are incorporated by reference into this
Prospectus, which means they are part of this Prospectus for legal purposes. The
Funds' annual report discusses the market conditions and investment strategies
that significantly affected each Fund's performance during its last fiscal year.
You may get free copies of any of these materials, request other information
about a Fund, or make shareholder inquiries by calling the Trust at
1-800-927-4648 or PIMCO Infolink Audio Response Network at 1-800-987-4626, or by
writing to:
PIMCO Funds:
Multi-Manager Series
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
You may review and copy information about the Trust, including its SAI, at the
Securities and Exchange Commission's public reference room in Washington, D.C.
You may call the Commission at 1-202-942-8090 for information about the
operation of the public reference room. You may also access reports and other
information about the Trust on the Commission's Web site at www.sec.gov. You may
get copies of this information, with payment of a duplication fee, by writing
the Public Reference Section of the Commission, Washington, D.C. 20549-6009, or
by e-mailing your request to [email protected]. Reference the Trust's
Investment Company Act file number in your correspondence.
Investment Company Act File No. 811-6161
[LOGO OF PIMCO FUNDS]
PIMCO Funds
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
PY000.11/00
<PAGE>
NOVEMBER 1, 2000
PIMCO Funds Prospectus
stock
Share Classes GROWTH STOCK FUNDS ENHANCED INDEX STOCK FUNDS
Growth Fund Tax-Efficient Equity Fund
A B C Select Growth Fund
Target Fund INTERNATIONAL STOCK FUNDS
Opportunity Fund Allianz Select
International Fund
International Fund
BLEND STOCK FUNDS
Growth & Income Fund
Capital Appreciation Fund SECTOR-RELATED STOCK FUNDS
Mid-Cap Fund Innovation Fund
Global Innovation Fund
VALUE STOCK FUNDS
Equity Income Fund
Renaissance Fund
Value Fund
Small-Cap Value Fund
This cover is not part of the Prospectus.
[LOGO OF PIMCO FUNDS]
<PAGE>
PIMCO Funds Prospectus
PIMCO This Prospectus describes 16 mutual funds offered by PIMCO Funds:
Funds: Multi-Manager Series. The Funds provide access to the professional
Multi- investment advisory services offered by PIMCO Advisors L.P. and
Manager its investment management affiliates. As of September 30, 2000,
Series PIMCO Advisors and its affiliates managed approximately
$272 billion.
November 1,
2000 The Prospectus explains what you should know about the Funds
before you invest. Please read it carefully.
The Securities and Exchange Commission has not approved or
Share disapproved these securities or determined if this Prospectus is
Classes truthful or complete. Any representation to the contrary is a
A, B criminal offense.
and C
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
Growth & Income Fund........................................... 13
Innovation Fund................................................ 15
International Fund............................................. 17
Mid-Cap Fund................................................... 19
Opportunity Fund............................................... 21
Renaissance Fund............................................... 23
Select Growth Fund............................................. 25
Allianz Select International Fund.............................. 27
Small-Cap Value Fund........................................... 29
Target Fund.................................................... 31
Tax-Efficient Equity Fund...................................... 33
Value Fund..................................................... 35
Summary of Principal Risks....................................... 37
Management of the Funds.......................................... 41
Investment Options - Class A, B and C Shares .................... 46
How Fund Shares Are Priced....................................... 48
How to Buy and Sell Shares....................................... 49
Fund Distributions............................................... 53
Tax Consequences................................................. 54
Characteristics and Risks of Securities and Investment
Techniques...................................................... 54
Financial Highlights............................................. 63
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The table below lists the investment objectives and compares certain
investment characteristics of the Funds. Other important characteristics are
described in the individual Fund Summaries beginning on page 5.
<TABLE>
<CAPTION>
Approximate Approximate
PIMCO Investment Main Number of Capitalization
Fund Objective Investments Holdings Range
--------------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Growth Stock Growth Long-term growth of capital; Common stocks of 35-40 At least $5 billion
Funds income is an incidental companies with
consideration market
capitalizations
of at least $5
billion
-----------------------------------------------------------------------------------------------------------------
Select Growth Long-term growth of capital; Common stocks of 15-25 At least $10 billion
income is an incidental companies with
consideration market
capitalizations
of at least $10
billion
-----------------------------------------------------------------------------------------------------------------
Target Capital appreciation; no Common stocks of 40-60 Between $1 billion
consideration is given to income companies with and $10 billion
market
capitalizations
of between $1
billion and
$10 billion
-----------------------------------------------------------------------------------------------------------------
Opportunity Capital appreciation; no Common stocks of 60-100 Between $100 million
consideration is given to income companies with and $2 billion
market
capitalizations
of between $100
million and $2
billion
--------------------------------------------------------------------------------------------------------------------------------
Blend Stock Growth & Income Long-term growth Securities of 40-60 At least $1 billion
Funds of capital; current income companies with
is a secondary objective market
capitalizations
of at least $1
billion
-----------------------------------------------------------------------------------------------------------------
Capital Appreciation Growth of capital Common stocks of 60-100 At least $1 billion
companies with
market
capitalizations
of at least $1
billion that
have improving
fundamentals and
whose stock is
reasonably
valued by the
market
-----------------------------------------------------------------------------------------------------------------
Mid-Cap Growth of capital Common stocks of 60-100 More than $500 million
companies with (excluding the largest
market 200 companies)
capitalizations
of more than
$500 million
(excluding the
largest 200
companies) that
have improving
fundamentals and
whose stock is
reasonably
valued by the
market
--------------------------------------------------------------------------------------------------------------------------------
Value Stock Equity Income Current income as a primary Income-producing 40-50 More than $2 billion
Funds objective; long-term growth of common stocks of
capital is a secondary objective companies with
market
capitalizations
of more than $2
billion
-----------------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of capital Common stocks of 50-80 All capitalizations
and income companies with
below-average
valuations whose
business
fundamentals are
expected to
improve
-----------------------------------------------------------------------------------------------------------------
Value Long-term growth of capital Common stocks of 40 More than $5 billion
and income companies with
market
capitalizations
of more than $5
billion and
below-average
valuations whose
business
fundamentals are
expected to
improve
-----------------------------------------------------------------------------------------------------------------
Small-Cap Value Long-term growth of capital Common stocks of 100 Between $100 million
and income companies with and $1.5 billion
market
capitalizations
of between $100
million and $1.5
billion and
below-average
price-to-
earnings ratios
relative to the
market and their
industry groups
--------------------------------------------------------------------------------------------------------------------------------
Enhanced Index Tax-Efficient Equity Maximum after-tax growth A broadly More than 200 More than $5 billion
Stock Funds of capital diversified
portfolio of at
least 200 common
stocks of
companies
represented in
the S&P 500
Index with
market
capitalizations
of more than $5
billion
--------------------------------------------------------------------------------------------------------------------------------
International Allianz Select Capital appreciation Common stocks of 30-60 More than $1 billion
Stock Funds International companies
located outside
of the United
States with
market
capitalizations
of more than $1
billion
-----------------------------------------------------------------------------------------------------------------
International Capital appreciation through Common stocks of 200-250 More than $500 million
investment in an international foreign (non-
portfolio; income is an incidental U.S.) issuers
consideration (developed and
emerging
markets) with
market
capitalizations
of more than
$500 million
--------------------------------------------------------------------------------------------------------------------------------
Sector-Related Innovation Capital appreciation; no Common stocks of 40 More than $200 million
Stock Funds consideration is given to income technology-
related
companies with
market
capitalizations
of more than
$200 million
-----------------------------------------------------------------------------------------------------------------
Global Innovation Capital appreciation; no Common stocks of 30-60 More than $200 million
consideration is given to income U.S. and non-
U.S. technology-
related
companies with
market
capitalizations
of more than
$200 million
</TABLE>
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
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. The
fact that a fund had good performance in the past (for example,
during the year ended 1999) is no assurance that the value of the
Fund's investments will not decline in the future or appreciate
at a slower rate. An investment in a Fund is not a deposit of a
bank and is not guaranteed or insured by the Federal Deposit
Insurance Corporation or any other government agency.
Prospectus 4
<PAGE>
PIMCO Capital Appreciation Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Larger Capitalization Range
and Seeks growth of capitalization At least $1 billion
Strategies capital common stocks
Fund Category Approximate Dividend Frequency
Blend Stocks Number of Holdings At least annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with larger market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers the 1,000 largest publicly traded
companies (in terms of market capitalization) in the U.S. The team
screens the stocks in this universe for a series of growth
criteria, such as dividend growth, earnings growth, relative
growth of earnings over time (earnings momentum) and the company's
history of meeting earnings targets (earnings surprise), and also
value criteria, such as price-to-earnings, price-to-book and
price-to-cash flow ratios. The team then selects individual stocks
by subjecting the top 10% of the stocks in the screened universe
to a rigorous analysis of company factors, such as strength of
management, competitive industry position, and business prospects,
and financial statement data, such as earnings, cash flows and
profitability. The team may interview company management in making
investment decisions. The Fund's capitalization criteria applies
at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team 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 . Credit Risk
. Issuer Risk . Focused Investment 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. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A, B and C shares
(1/20/97), performance information shown in the bar chart and
tables for those classes is based on the performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual sales charges (in the Average
Annual Total Returns table only), distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
A, B and C shares. Past performance is no guarantee of future
results.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Capital Appreciation Fund (continued)
Calendar Year Total Returns -- Class A
More Recent Return
Information
--------------------
1/1/00-
9/30/00 17.41%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 23.73%
--------------------
Lowest (7/1/98-
9/30/98) -14.22%
[GRAPH]
1992 7.08%
1993 17.24%
1994 -4.64%
1995 36.61%
1996 26.29%
1997 33.72%
1998 17.18%
1999 22.19%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
--------------------------------------------------------------------
<S> <C> <C> <C>
Class A 15.47% 25.57% 18.84%
--------------------------------------------------------------------
Class B 16.31% 25.92% 18.89%
--------------------------------------------------------------------
Class C 20.32% 26.07% 18.72%
--------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.75%
--------------------------------------------------------------------
Lipper Multi-Cap Core Funds Average(/2/) 20.63% 23.01% 17.15%
--------------------------------------------------------------------
</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 Multi-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges without concentrating in any one market
capitalization range over an extended period of time. It does
not take into account sales charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.45% 0.25% 0.41% 1.11%
-----------------------------------------------------------------
Class B 0.45 1.00 0.41 1.86
-----------------------------------------------------------------
Class C 0.45 1.00 0.41 1.86
-----------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion, and 0.01% in other
expenses attributable to that class during the most recent
fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $657 $883 $1,128 $1,827 $657 $883 $1,128 $1,827
-----------------------------------------------------------------------------------------------------------
Class B 689 885 1,206 1,887 189 585 1,006 1,887
-----------------------------------------------------------------------------------------------------------
Class C 289 585 1,006 2,180 189 585 1,006 2,180
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus
6
<PAGE>
PIMCO Equity Income Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Income producing More than
and Seeks current common stocks with $2 billion
Strategies income as a potential for
primary capital Dividend Frequency
objective; appreciation Quarterly
long-term
growth of Approximate Number
capital is a of Holdings
secondary 40-50
objective
Fund Category
Value Stocks
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in income-producing (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 to a limited degree 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, except that it may invest without limit in 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 .Interest Rate 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 and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A, B and C shares
(1/20/97), performance information shown in the bar chart and
tables for those classes is based on the performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual sales charges (in the Average
Annual Total Returns table only), distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
A, B and C shares. 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 A
More Recent Return
Information
--------------------
1/1/00-9/30/00 7.02%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4/1/99-
6/30/99) 16.00%
--------------------
Lowest (7/1/98-
9/30/98) -10.98%
[GRAPH]
1992 14.29%
1993 8.03%
1994 -2.00%
1995 32.94%
1996 21.00%
1997 30.88%
1998 8.03%
1999 -2.31%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
--------------------------------------------------------------------
<S> <C> <C> <C>
Class A -7.67% 15.99% 13.09%
--------------------------------------------------------------------
Class B -6.71% 16.26% 13.14%
--------------------------------------------------------------------
Class C -3.81% 16.45% 12.97%
--------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.75%
--------------------------------------------------------------------
Lipper Equity Income Funds Average(/2/) 3.62% 17.60% 14.24%
--------------------------------------------------------------------
</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 Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively high current income and
growth of income through investing 65% or more of their
portfolios in dividend-paying equities. It does not take into
account sales charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.45% 0.25% 0.42% 1.12%
-----------------------------------------------------------------
Class B 0.45 1.00 0.42 1.87
-----------------------------------------------------------------
Class C 0.45 1.00 0.42 1.87
-----------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion, and 0.02% in other
expenses attributable to that class during the most recent
fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $658 $886 $1,133 $1,838 $658 $886 $1,133 $1,838
-----------------------------------------------------------------------------------------------------------
Class B 690 888 1,211 1,898 190 588 1,011 1,898
-----------------------------------------------------------------------------------------------------------
Class C 290 588 1,011 2,190 190 588 1,011 2,190
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus
8
<PAGE>
PIMCO Global Innovation Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks of Capitalization Range
and Seeks capital U.S. and non-U.S. More than $200
Strategies appreciation; technology-related million
no companies
consideration Dividend Frequency
is given to Approximate Number At least annually
income of Holdings
30-60
Fund Category
Sector-Related
Stocks
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 may invest a
substantial portion of its assets in the securities of smaller
capitalization companies and securities issued in initial public
offerings (IPOs). 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 invests primarily in
securities traded principally in the securities markets of
developed countries, the Fund has no other prescribed limits on
geographic asset distribution and may invest in any foreign
securities market in the world, including in developing, or
"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 . Smaller Company Risk . Currency Risk
. Issuer Risk . Liquidity Risk . Focused Investment
. Technology . Derivatives Risk Risk
Related Risk . Foreign Investment Risk . Leveraging Risk
. Growth . Emerging Markets Risk . Credit Risk
Securities Risk . Management Risk
. IPO 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.
PIMCO Funds: Multi-Manager Series
9
<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 A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual Net Fund
Advisory and/or Service Other Fund Operating Expense Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses Reduction(/3/) Expenses(/3/)
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class A 1.00% 0.25% 0.66% 1.91% (0.06%) 1.85%
----------------------------------------------------------------------------------------------
Class B 1.00 1.00 0.70 2.70 (0.10) 2.60
----------------------------------------------------------------------------------------------
Class C 1.00 1.00 0.70 2.70 (0.10) 2.60
----------------------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.60% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion, and 0.06%, 0.10% and
0.10% in organizational expenses ("Organizational Expenses")
attributable to Class A, Class B, and Class C shares,
respectively, during the most recent fiscal year.
(3) Net Expenses reflect the effect of a contractual agreement by
PIMCO Advisors to waive, reduce or reimburse its Administrative
Fee for each class to the extent Annual Fund Operating Expenses
exceeded, due to the payment of organizational and certain other
expenses, 1.85% for Class A shares and 2.60% for Class B and
Class C shares during the Fund's most recent (initial) fiscal
year. Under the Expense Limitation Agreement, PIMCO Advisors may
recoup these waivers and reimbursements (which do not continue
after the Fund's initial fiscal year) in future periods, not
exceeding three years, provided total expenses, including such
recoupment, do not exceed the annual expense limit.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $728 $1,099 $1,494 $2,594 $728 $1,099 $1,494 $2,594
-----------------------------------------------------------------------------------------------------------
Class B 763 1,107 1,577 2,646 263 807 1,377 2,646
-----------------------------------------------------------------------------------------------------------
Class C 363 807 1,377 2,919 263 807 1,377 2,919
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
PIMCO Growth Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Larger Capitalization
and Seeks long-term capitalization Range
Strategies growth of common stocks At least $5 billion
capital; income
is an Approximate Number Dividend Frequency
incidental of Holdings At least annually
consideration 35-40
Fund Category
Growth Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of at least $5 billion at
the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify 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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future.
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 .Focused Investment Risk
. Issuer Risk .Currency Risk .Credit Risk
. Growth .Technology Related Risk .Management Risk
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 Information
The top of the next page shows summary performance information for
the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class C shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A shares (10/26/90)
and Class B shares (5/23/95), performance information shown in the
Average Annual Total Returns table for those classes is based on
the performance of the Fund's Class C shares. The prior Class C
performance has been adjusted to reflect the actual sales charges,
distribution and/or service (12b-1) fees, administrative fees and
other expenses paid by Class A and B shares. Prior to March 6,
1999, the Fund had a different sub-adviser and would not
necessarily have achieved the performance results shown on the
next page under its current investment management arrangements.
Past performance is no guarantee of future results.
PIMCO Funds: Multi-Manager Series
11
<PAGE>
PIMCO Growth Fund (continued)
Calendar Year Total Returns -- Class C
More Recent Return
Information
--------------------
1/1/00-9/30/00 4.43%
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]
1990 0.29%
1991 41.88%
1992 2.08%
1993 9.32%
1994 -0.75%
1995 27.47%
1996 17.52%
1997 21.84%
1998 38.90%
1999 39.83%
Calendar Year End (through12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 33.33% 28.36% 18.99% 19.71%
------------------------------------------------------------------
Class B 34.78% 28.65% 19.06% 19.75%
------------------------------------------------------------------
Class C 38.83% 28.80% 18.77% 19.25%
------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 18.21% 18.60%
------------------------------------------------------------------
Lipper Large-Cap Growth Funds
Average(/2/) 40.54% 29.41% 18.88% 17.74%
------------------------------------------------------------------
</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 Large-Cap Growth Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. It
does not take into account sales charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin
on 2/29/84.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.50% 0.25% 0.41% 1.16%
-----------------------------------------------------------------
Class B 0.50 1.00 0.41 1.91
-----------------------------------------------------------------
Class C 0.50 1.00 0.41 1.91
-----------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion, and 0.01% in other
expenses attributable to that class during the most recent
fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $662 $898 $1,153 $1,881 $662 $898 $1,153 $1,881
-----------------------------------------------------------------------------------------------------------
Class B 694 900 1,232 1,941 194 600 1,032 1,941
-----------------------------------------------------------------------------------------------------------
Class C 294 600 1,032 2,233 194 600 1,032 2,233
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus
12
<PAGE>
PIMCO Growth & Income Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Medium and large Capitalization
and Seeks long-term capitalization Range
Strategies growth of common stocks At least $1 billion
capital;
current income Approximate Number Dividend Frequency
is a secondary of Holdings At least annually
objective 40-60
Fund Category
Blend Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in securities of companies
with market capitalizations of at least $1 billion at the time of
investment. The Fund may invest up to 75% of its assets in
securities selected for their growth potential. The Fund will
normally invest at least 25% of its assets in securities selected
for their income potential, including dividend-paying common
stocks, preferred stocks, corporate bonds, convertible securities
and real estate investment trusts (REITs).
When selecting securities for the Fund's "growth" segment, 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's portfolio managers may choose to
sell a stock in the "growth" segment when they believe that its
earnings will be disappointing or that market sentiment on the
company will turn negative. The portfolio managers will also
consider selling a stock if the company does not meet the
managers' estimates on revenues and/or earnings, or if an
alternative investment is deemed to be more attractive.
When selecting securities for the Fund's "Income" segment, the
portfolio managers seek to identify companies with strong
operating fundamentals that offer potential for capital
appreciation and that also have a dividend yield in excess of the
yield on the S&P 500 Index. The portfolio managers may replace an
"income" security when another security with a similar risk-to-
reward profile offers either better potential for capital
appreciation or a higher yield than the Fund's current holding. To
achieve its income objective, the Fund may also invest to a
limited degree in preferred stocks, convertible securities and
REITs. The Fund may invest up to 10% of its assets in corporate
bonds, which will typically consist of investment grade securities
of varying maturities but may also include high yield securities
("junk bonds") rated at least B by Standard & Poor's Rating
Services or Moody's Investors Service, Inc. or, if unrated,
determined by the Adviser to be of comparable quality.
The Fund may invest up to 15% of its assets in foreign
securities, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future. 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 . Liquidity Risk . Interest Rate Risk
. Issuer Risk . Foreign Investment . High Yield Risk
. Growth Securities Risk . Credit Risk
Risk . Currency Risk . Management Risk
. Value Securities . Focused Investment
Risk Risk
. Smaller Company Risk . Technology Related Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares,
which are offered in a different prospectus. This is because the
Fund did not offer Class A, B or C shares during the periods
shown. Although Institutional Class and Class A, B and C shares
would have similar annual returns (because all the Fund's shares
represent interests in the same portfolio of securities),
Institutional Class performance would be higher than Class A, B or
C performance because of the lower expenses and no sales charges
paid by Institutional Class shares. The Average Annual Total
Returns table also shows estimated historical performance for
Class A, B, and C shares based on the performance of the Fund's
Institutional Class shares, adjusted to reflect the actual sales
charges (loads), distribution and/or service (12b-1) fees,
administrative fees and other expenses paid by Class A, B and C
shares. The performance information on the next page for periods
prior to August 1, 2000 reflects the Fund's advisory fee rate in
effect prior to that date (0.63% per annum), which is higher than
the current rate (0.60% per annum). 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 August 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.
13 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Growth & Income Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00-
9/30/00 23.58%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 40.12%
--------------------
Lowest (7/1/98-
9/30-98) -11.53%
Calendar Year End (through 12/31)
[GRAPH]
Annual Return
95 31.72%
96 17.31%
97 16.22%
98 29.89%
99 51.81%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/28/94)(/3/)
-----------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 51.81% 28.77% 28.72%
-----------------------------------------------------------------------
Class A 42.90% 26.82% 26.77%
-----------------------------------------------------------------------
Class B 45.99% 27.17% 27.20%
-----------------------------------------------------------------------
Class C 49.30% 27.32% 27.27%
-----------------------------------------------------------------------
S&P Mid-Cap 400 Index(/1/) 14.73% 23.05% 23.05%
-----------------------------------------------------------------------
Lipper Large-Cap Core Funds
Average(/2/) 22.77% 25.49% 25.49%
-----------------------------------------------------------------------
</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 Large-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. It
does not take into account sales charges. The Lipper Large-Cap
Core Funds Average replaced the Lipper Mid-Cap Fund Average (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) because PIMCO Advisors believes the Large-
Cap Core Funds Average is more representative of the Fund's
investment strategies. For periods ended December 31, 1999,
the 1 Year, 5 Years and Fund Inception average annual total
returns of the Lipper Mid-Cap Fund Average were 39.38%, 23.07%
and 23.07%, respectively.
(3) The Fund began operations on 12/28/94. Index comparisons begin
on 12/31/94.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees(/1/) (12b-1) Fees (/2/) Expenses(/3/) Expenses
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.60% 0.25% 0.65% 1.50%
-------------------------------------------------------------------
Class B 0.60 1.00 0.65 2.25
-------------------------------------------------------------------
Class C 0.60 1.00 0.65 2.25
-------------------------------------------------------------------
</TABLE>
(1) On August 1, 2000, the Fund's advisory fee rate decreased by
0.03% to 0.60% per annum.
(2) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(3) Other Expenses reflects a 0.50% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion, and 0.15% in other
expenses estimated to be attributable to the class during the
current fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you redeem your shares at the
end of each period Example: Assuming you do not redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $694 $ 998 $1,323 $2,242 $694 $998 $1,323 $2,242
----------------------------------------------------------------------------------------------------------
Class B 728 1,003 1,405 2,301 228 703 1,205 2,301
----------------------------------------------------------------------------------------------------------
Class C 328 703 1,205 2,585 228 703 1,205 2,585
----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 14
<PAGE>
PIMCO Innovation Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks of Capitalization Range
and Seeks capital technology-related More than $200
Strategies appreciation; companies million
no
consideration Approximate Number Dividend Frequency
is given to of Holdings At least annually
income 40
Fund
Category
Sector-Related
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 a
substantial portion of its assets in the securities of smaller
capitalization companies. The Fund may invest up to 15% of its
assets in foreign securities, except that it may invest without
limit in 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 . Foreign Investment Risk . Management Risk
Risk . Technology Related 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. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class B shares (5/22/95),
performance information shown in the Average Annual Total Returns
table for that class is based on the performance of the Fund's
Class A shares. The prior Class A performance has been adjusted to
reflect the actual sales charges, distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
B shares. Prior to March 6, 1999, the Fund had a different sub-
adviser and would not necessarily have achieved the performance
results shown on the next page under its current investment
management arrangements. Past performance is no guarantee of
future results.
PIMCO Funds: Multi-Manager Series
15
<PAGE>
PIMCO Innovation Fund (continued)
Calendar Year Total Returns -- Class A
More Recent
Return
Information
------------------
1/1/00-
9/30/00 21.31%
Highest and
Lowest Quarter
Returns
(for periods
shown in the bar
chart)
------------------
Highest (10/1/99-
12/31/99) 80.12%
------------------
Lowest (1/1/97-
3/31/97) -12.56%
[GRAPH]
Annual Return
95 46.33%
96 23.60%
97 9.03%
98 79.41%
99 139.40%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/22/94)(/3/)
-----------------------------------------------------------------------------
<S> <C> <C> <C>
Class A 126.24% 51.38% 51.01%
-----------------------------------------------------------------------------
Class B 133.51% 51.98% 51.65%
-----------------------------------------------------------------------------
Class C 137.44% 52.05% 51.68%
-----------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 28.56%
-----------------------------------------------------------------------------
Lipper Science and Technology Fund Average(/2/) 135.19% 41.03% 41.03%
-----------------------------------------------------------------------------
</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 Science and Technology Fund Average is a total
return performance average of funds tracked by Lipper
Analytical Services, Inc. that invest at least 65% of their
assets in science and technology stocks. It does not take into
account sales charges.
(3) The Fund began operations on 12/22/94. Index comparisons begin
on 12/31/94.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.65% 0.25% 0.40% 1.30%
-----------------------------------------------------------------
Class B 0.65 1.00 0.40 2.05
-----------------------------------------------------------------
Class C 0.65 1.00 0.40 2.05
-----------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $675 $939 $1,224 $2,032 $675 $939 $1,224 $2,032
-------------------------------------------------------------------------------------------------------
Class B 708 943 1,303 2,091 208 643 1,103 2,091
-------------------------------------------------------------------------------------------------------
Class C 308 643 1,103 2,379 208 643 1,103 2,379
-------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus
16
<PAGE>
PIMCO International Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks of Capitalization Range
and Seeks capital foreign (non-U.S.) More than $500
Strategies appreciation issuers million
through
investment in Approximate Number Dividend Frequency
an of Holdings At least annually
international 200-250
portfolio;
income is an
incidental
consideration
Fund
Category
International
Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in an international portfolio
of common stocks, which may or may not pay dividends. The Fund
normally invests in securities traded principally in developed
foreign securities markets, but may also invest up to 30% of its
assets in developing or "emerging" markets. The Fund has no
prescribed limits on geographic asset distribution and may invest
in any foreign securities market in the world. The Fund may also
invest in securities of foreign issuers traded on U.S. securities
markets, but will normally not invest in U.S. issuers. The Fund
invests most of its assets in foreign securities which trade in
currencies other than the U.S. dollar and may invest directly in
foreign currencies.
The portfolio manager uses a "top down" investment approach. He
first determines regional and country weightings for the Fund by
considering such factors as the condition and growth potential of
the various economies and securities markets, currency and
taxation considerations and other financial, social, national and
political factors. The Sub-Adviser's country specialists then
select individual stocks to fill out the desired country
weightings. In selecting stocks, the specialists analyze a broad
range of company fundamentals, such as price-to-earnings, price-
to-book value and price-to-cash flow ratios (value factors),
earnings, dividend and profit growth (growth factors) and balance
sheet strength and return on assets (quality factors). The
portfolio manager sells stocks in order to adjust or rebalance the
Fund's regional and country weightings or to replace companies
with weakening fundamentals.
The Fund may utilize foreign currency exchange contracts and
derivative instruments (such as stock index futures contracts)
primarily for risk management or hedging purposes. The Fund may
also invest in equity securities other than common stocks (such as
preferred stocks and convertible securities) and may invest up to
10% of its assets in other investment companies. In response to
unfavorable market and other conditions, the Fund may make
temporary investments of some or all of its assets in foreign and
domestic fixed income securities and in equity securities of U.S.
issuers. This would be inconsistent with the Fund's investment
objective and principal strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
<TABLE>
<S> <C> <C>
. Foreign .Value Securities Risk .Focused Investment Risk
Investment Risk .Growth Securities Risk .Leveraging Risk
. Emerging Markets .Smaller Companies Risk .Credit Risk
Risk .Liquidity Risk .Management Risk
. Currency Risk .Derivatives Risk
. Market Risk
. Issuer 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 and the information to its
right show performance of the Fund's Class C shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A shares (2/1/91) and
Class B shares (5/22/95), performance information shown in the
Average Annual Total Returns table for those classes is based on
the performance of the Fund's Class C shares. The prior Class C
performance has been adjusted to reflect the actual sales charges,
distribution and/or service (12b-1) fees, administrative fees and
other expenses paid by Class A and B shares. The Fund had
different sub-advisers during the periods prior to November 15,
1994 and would not necessarily have achieved the performance
results shown on the next page under its current investment
management arrangements. Past performance is no guarantee of
future results.
PIMCO Funds: Multi-Manager Series
17
<PAGE>
PIMCO International Fund (continued)
Calendar Year Total Returns -- Class C
More Recent Return
Information
--------------------
1/1/00-
9/30/00 -18.87%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 21.58%
--------------------
Lowest (7/1/98-
9/30/98) -22.16%
[GRAPH]
1990 -15.50%
1991 19.92%
1992 -5.84%
1993 33.47%
1994 -8.16%
1995 5.79%
1996 5.76%
1997 1.85%
1998 8.27%
1999 27.00%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (8/25/86)(/3/)
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 20.59% 8.96% 6.43% 8.17%
--------------------------------------------------------------
Class B 21.97% 9.13% 6.49% 8.21%
--------------------------------------------------------------
Class C 26.00% 9.40% 6.24% 7.83%
--------------------------------------------------------------
MSCI EAFE Index 27.31% 13.15% 7.34% 10.35%
--------------------------------------------------------------
Lipper International Fund
Average(/2/) 40.76% 15.13% 10.28% 11.59%
--------------------------------------------------------------
</TABLE>
(1) The Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East) ("MSCI EAFE") Index is a widely
recognized, unmanaged index of issuers in countries of Europe,
Australia and Asia. It is not possible to invest directly in
the index.
(2) The Lipper International Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest their assets in securities whose
primary trading markets are outside of the United States. It
does not take into account sales charges.
(3) The Fund began operations on 8/25/86. Index comparisons begin
on 8/31/86.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees (/1/) Expenses(/2/) Expenses
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.55% 0.25% 0.72% 1.52%
------------------------------------------------------------------
Class B 0.55 1.00 0.73 2.28
------------------------------------------------------------------
Class C 0.55 1.00 0.73 2.28
------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.65% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion, and 0.07% in other
expenses attributable to Class A shares during the most recent
fiscal year and 0.08% in other expenses attributable to Class B
and Class C shares during the most recent fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you redeem your shares at the
end of each period Example: Assuming you do not redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $696 $1,004 $1,333 $2,263 $696 $1,004 $1,333 $2,263
----------------------------------------------------------------------------------------------------------
Class B 731 1,012 1,420 2,329 231 712 1,220 2,329
----------------------------------------------------------------------------------------------------------
Class C 331 712 1,220 2,615 231 712 1,220 2,615
----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 18
<PAGE>
PIMCO Mid-Cap Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Medium Capitalization
and Seeks growth of capitalization Range
Strategies capital common stocks More than $500
million (excluding
Fund Approximate Number the largest 200
Category of Holdings companies)
Blend Stocks 60-100
Dividend Frequency
At least annually
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with medium market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations of more than $500 million, but excluding the 200
largest capitalization companies. The team screens the stocks in
this universe for a series of growth criteria, such as dividend
growth, earnings growth, relative growth of earnings over time
(earnings momentum) and the company's history of meeting earnings
targets (earnings surprise), and also value criteria, such as
price-to-earnings, price-to-book and price-to-cash flow ratios.
The team then selects individual stocks by subjecting the top 10%
of the stocks in the screened universe to a rigorous analysis of
company factors, such as strength of management, competitive
industry position, and business prospects, and financial statement
data, such as earnings, cash flows and profitability. The team may
interview company management in making investment decisions. The
Fund's capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team 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 . Liquidity Risk . Management Risk
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. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A, B and C shares
(1/13/97), performance information shown in the bar chart and
tables for those classes is based on the performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual sales charges (in the Average
Annual Total Returns table only), distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
A, B and C shares. Past performance is no guarantee of future
results.
PIMCO Funds: Multi-Manager Series
19
<PAGE>
PIMCO Mid-Cap Fund (continued)
Calendar Year Total Returns -- Class A
More Recent Return
Information
--------------------
1/1/00-
9/30/00 27.80%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 22.92%
--------------------
Lowest (7/1/98-
9/30/98) -14.50%
[GRAPH]
1992 8.75%
1993 15.32%
1994 -2.75%
1995 36.76%
1996 22.87%
1997 33.62%
1998 7.46%
1999 12.54%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (8/26/91)(/3/)
------------------------------------------------------------------
<S> <C> <C> <C>
Class A 6.35% 20.74% 16.33%
------------------------------------------------------------------
Class B 6.68% 21.03% 16.39%
------------------------------------------------------------------
Class C 10.68% 21.22% 16.25%
------------------------------------------------------------------
Russell Mid-Cap Index(/1/) 18.23% 21.85% 17.31%
------------------------------------------------------------------
Lipper Mid-Cap Core Funds Average(/2/) 29.16% 21.12% 16.55%
------------------------------------------------------------------
</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 Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of less than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. It
does not take into account sales charges.
(3) The Fund began operations on 8/26/91. Index comparisons begin
on 8/31/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.45% 0.25% 0.41% 1.11%
-----------------------------------------------------------------
Class B 0.45 1.00 0.41 1.86
-----------------------------------------------------------------
Class C 0.45 1.00 0.41 1.86
-----------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion, and 0.01% in other
expenses attributable to that class during the most recent
fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $657 $883 $1,128 $1,827 $657 $883 $1,128 $1,827
-----------------------------------------------------------------------------------------------------------
Class B 689 885 1,206 1,887 189 585 1,006 1,887
-----------------------------------------------------------------------------------------------------------
Class C 289 585 1,006 2,180 189 585 1,006 2,180
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus
20
<PAGE>
PIMCO Opportunity Fund
--------------------------------------------------------------------------------
Principal Investment Fund Approximate
Investments Objective Focus Capitalization Range
and Seeks capital Smaller Between $100
Strategies appreciation; capitalization million and $2
no common stocks billion
consideration
is given to Approximate Number Dividend
income of Holdings Frequency
60-100 At least
Fund annually
Category
Growth Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of between $100 million and
$2 billion at the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify 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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund may invest a substantial
portion of its assets in the securities of smaller capitalization
companies and securities issued in initial public offerings
(IPOs). The Fund has in the past invested a significant portion of
its assets in technology or technology-related companies, although
there is no assurance that it will continue to do so in the
future.
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 . IPO Risk . Technology Related
. Issuer Risk . Liquidity Risk Risk
. Growth Securities Risk . Foreign Investment . Focused Investment
. Smaller Company Risk Risk Risk
. Currency Risk . Credit Risk
. Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class C shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A shares (12/17/90)
and Class B shares (4/1/99), performance information shown in the
Average Annual Total Returns table for those classes is based on
the performance of the Fund's Class C shares. The prior Class C
performance has been adjusted to reflect the actual sales charges,
distribution and/or service (12b-1) fees, administrative fees and
other expenses paid by Class A and B shares. Prior to March 6,
1999, the Fund had a different sub-adviser and would not
necessarily have achieved the performance results shown on the
next page under its current investment management arrangements.
Past performance is no guarantee of future results.
PIMCO Funds: Multi-Manager Series
21
<PAGE>
PIMCO Opportunity Fund (continued)
Calendar Year Total Returns -- Class C
More Recent Return
Information
--------------------
1/1/00-9/30/00 5.06%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/01/99-
12/31/99) 45.70%
--------------------
Lowest (7/1/98-
9/30/98) -25.78%
[GRAPH]
1990 -7.34%
1991 68.08%
1992 28.46%
1993 36.16%
1994 -4.74%
1995 41.43%
1996 11.54%
1997 -4.75%
1998 1.29%
1999 63.99%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
-------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 55.98% 19.60% 20.73% 19.37%
-------------------------------------------------------------------
Class B 58.95% 19.90% 20.80% 19.40%
-------------------------------------------------------------------
Class C 62.99% 20.09% 20.55% 18.93%
-------------------------------------------------------------------
Russell 2000 Index(/1/) 21.25% 16.69% 13.40% 12.49%
-------------------------------------------------------------------
Lipper Small-Cap Growth
Funds Average(/2/) 61.78% 22.83% 18.12% 15.00%
-------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Small-Cap Growth Funds 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 250% of the dollar-weighted
median market capitalization of the S&P Small-Cap 600 Index.
It does not take into account sales charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin
on 2/29/84.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.65% 0.25% 0.41% 1.31%
-----------------------------------------------------------------
Class B 0.65 1.00 0.41 2.06
-----------------------------------------------------------------
Class C 0.65 1.00 0.41 2.06
-----------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion, and 0.01% in other
expenses attributable to that class during the most recent
fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $676 $942 $1,229 $2,042 $676 $942 $1,229 $2,042
-----------------------------------------------------------------------------------------------------------
Class B 709 946 1,308 2,102 209 646 1,108 2,102
-----------------------------------------------------------------------------------------------------------
Class C 309 646 1,108 2,390 209 646 1,108 2,390
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus
22
<PAGE>
PIMCO Renaissance Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued stocks Capitalization Range
and Seeks long-term with improving All capitalizations
Strategies growth of business
capital and fundamentals Dividend Frequency
income At least annually
Approximate Number
Fund of Holdings
Category 50-80
Value Stocks
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 to a limited degree 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, except that it may invest without limit in 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. The bar chart and the information to its
right show performance of the Fund's Class C shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A shares (2/1/91) and
Class B shares (5/22/95), performance information shown in the
Average Annual Total Returns table for those classes is based on
the performance of the Fund's Class C shares. The prior Class C
performance has been adjusted to reflect the actual sales charges,
distribution and/or service (12b-1) fees, administrative fees and
other expenses paid by Class A and B shares. Prior to May 7, 1999,
the Fund had a different sub-adviser and would not necessarily
have achieved the performance results shown on the next page under
its current investment management arrangements. Past performance
is no guarantee of future results.
PIMCO Funds: Multi-Manager Series
23
<PAGE>
PIMCO Renaissance Fund (continued)
Calendar Year Total Returns -- Class C
More Recent Return
Information
--------------------
1/1/00-
9/30/00 17.70%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/98-
12/31/98) 18.37%
--------------------
Lowest (7/1/98-
9/30/98) -16.77%
[GRAPH]
1990 -15.46%
1991 33.24%
1992 7.78%
1993 21.23%
1994 -5.05%
1995 27.61%
1996 24.40%
1997 34.90%
1998 10.72%
1999 9.02%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (4/18/88)(/3/)
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 3.79% 20.45% 13.92% 13.45%
------------------------------------------------------------------
Class B 4.66% 20.70% 13.97% 13.49%
------------------------------------------------------------------
Class C 8.16% 20.92% 13.70% 13.15%
------------------------------------------------------------------
Russell Mid-Cap Value
Index(/1/) - 0.10% 18.00% 13.81% 14.53%
------------------------------------------------------------------
Lipper Multi-Cap Value Funds
Average(/2/) 6.69% 18.32% 13.11% 13.67%
------------------------------------------------------------------
</TABLE>
(1) The Russell Mid-Cap Value Index is an unmanaged index that
measures the performance of medium capitalization 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 Mid-Cap Value Index
replaced the Russell 1000 Value Index (an unmanaged index that
measures the performance of companies in the Russell 1000
Index considered to have less than average growth orientation)
and the S&P 500 Index (an unmanaged index of large
capitalization common stocks) as the Fund's comparative index
because PIMCO Advisors believes the Russell Mid-Cap 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 Russell 1000 Value Index were 7.34%, 23.08%,
15.60% and 15.38%, respectively, and of the S&P 500 Index were
21.04%, 28.56%, 18.21% and 19.06%, respectively.
(2) The Lipper Multi-Cap Value Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges without concentrating in any one market
capitalization range over an extended period of time.
(3) The Fund began operations on 4/18/88. Index comparisons begin
on 4/30/88.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
-----------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.60% 0.25% 0.40% 1.25%
-----------------------------------------------------------------
Class B 0.60 1.00 0.40 2.00
-----------------------------------------------------------------
Class C 0.60 1.00 0.40 2.00
-----------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $670 $925 $1,199 $1,978 $670 $925 $1,199 $1,978
-----------------------------------------------------------------------------------------------------------
Class B 703 927 1,278 2,038 203 627 1,078 2,038
-----------------------------------------------------------------------------------------------------------
Class C 303 627 1,078 2,327 203 627 1,078 2,327
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 24
<PAGE>
PIMCO Select Growth Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Larger Capitalization Range
and Seeks long-term capitalization At least $10
Strategies growth of common stocks billion
capital; income
is an incidental Approximate Number Dividend Frequency
consideration of Holdings At least annually
15-25
Fund Category
Growth Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of at least $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 also invest to a limited degree in other kinds of
equity securities, including preferred stocks and convertible
securities. The Fund may invest up to 25% of its assets in foreign
securities, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future. 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 . Focused Investment Risk . Currency Risk
. Issuer Risk . Growth Securities Risk . Credit Risk
. Technology Related . Foreign Investment Risk . Management Risk
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance
Information The top of the next page shows summary performance information for
the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares,
which are offered in a different prospectus. This is because the
Fund did not offer Class A, B or C shares during the periods
shown. Although Institutional Class and Class A, B and C shares
would have similar annual returns (because all the Fund's shares
represent interests in the same portfolio of securities),
Institutional Class performance would be higher than Class A, B or
C performance because of the lower expenses and no sales charges
(loads) paid by Institutional Class shares. The Average Annual
Total Returns table also shows estimated historical performance
for Class A, B and C shares based on the performance of the Fund's
Institutional Class shares, adjusted to reflect the actual sales
charges, distribution and/or service (12b-1) fees, administrative
fees and other expenses paid by Class A, B and C shares. The
performance information on the next page for periods prior to
April 1, 2000 reflects the Fund's advisory fee rate in effect
prior to that date (0.57% per annum); these results would have
been lower had the Fund's current advisory fee rate (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.
25 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Select Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00-
9/30/00 16.44%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/01/98-
12/31/98) 24.90%
--------------------
Lowest (7/1/98-
9/30/98) -11.38%
[GRAPH]
Annual Return
1995 27.96%
1996 17.95%
1997 25.32%
1998 41.06%
1999 24.27%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/28/94)(/3/)
--------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 24.27% 27.09% 27.06%
--------------------------------------------------------------------
Class A 16.97% 25.17% 25.14%
--------------------------------------------------------------------
Class B 17.86% 25.50% 25.55%
--------------------------------------------------------------------
Class C 21.86% 25.66% 25.63%
--------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 28.56%
--------------------------------------------------------------------
Lipper Large-Cap Growth Funds
Average(/2/) 40.54% 29.41% 29.41%
--------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Large-Cap Growth Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. It
does not take into account sales charges.
(3) The Fund began operations on 12/28/94. Index comparisons begin
on 12/31/94.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees(/1/) (12b-1) Fees(/2/) Expenses(/3/) Expenses
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.60% 0.25% 0.40% 1.25%
------------------------------------------------------------------
Class B 0.60 1.00 0.40 2.00
------------------------------------------------------------------
Class C 0.60 1.00 0.40 2.00
------------------------------------------------------------------
</TABLE>
(1) On April 1, 2000, the Fund's advisory fee rate increased by
0.03%, to 0.60% per annum.
(2) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(3) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $670 $925 $1,199 $1,978 $670 $925 $1,199 $1,978
-----------------------------------------------------------------------------------------------------------
Class B 703 927 1,278 2,038 203 627 1,078 2,038
-----------------------------------------------------------------------------------------------------------
Class C 303 627 1,078 2,327 203 627 1,078 2,327
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 26
<PAGE>
PIMCO Allianz Select International Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks Capitalization
and Seeks capital of non-U.S. Range
Strategies appreciation issuers More than $1
billion
Fund Category Approximate Number
International of Holdings Dividend
Stocks 30-60 Frequency
At least
annually
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in an international portfolio
of common stocks and other equity securities of companies located
outside of the United States. Although the Fund normally invests
in issuers from at least five different countries, it may at times
invest in fewer than five countries, or even a single country. The
Fund typically invests in approximately 30 to 60 stocks. Although
the Fund invests primarily in developed market countries, it may
also invest in developing, or "emerging," markets. The Fund has no
other limits on geographic asset distribution and may invest in
any foreign securities market in the world. The Fund may also
invest in securities of foreign issuers traded on U.S. securities
markets, but will normally not invest in U.S. issuers. The Fund
invests most of its assets in foreign securities which trade in
currencies other than the U.S. dollar and may invest directly in
foreign currencies.
The portfolio manager selects securities for the Fund using a
research-driven "bottom-up" approach that seeks to utilize the
Sub-Adviser's global research capabilities to identify companies
with above-average long-term growth prospects and attractive
valuations and that possess a sustainable competitive advantage,
such as superior or innovative products, personnel and
distribution systems. The portfolio manager seeks to select those
stocks with the best long-term performance expectations, using a
broad range of company fundamentals, such as long-term growth
prospects, price-to-earnings ratios and other valuation measures,
dividend and profit growth, balance sheet strength and return on
assets. The portfolio managers sell stocks in order to adjust or
rebalance the Fund's portfolio and to replace companies with
weakening fundamentals.
The Fund may invest a substantial portion of its assets in the
securities of small and medium capitalization companies. The Fund
may utilize foreign currency exchange contracts and derivative
instruments (such as stock index futures contracts), primarily for
portfolio management and hedging purposes. The Fund may to a
limited degree invest in equity securities other than common
stocks (such as equity-linked securities, preferred stocks and
convertible securities) and may invest up to 10% of its assets in
other investment companies. In response to unfavorable market and
other conditions, the Funds may make temporary investments of some
or all of its assets in foreign and domestic fixed income
securities and in equity securities of U.S. issuers. This would be
inconsistent with the Fund's investment objective and principal
strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
<TABLE>
<S> <C> <C>
. Foreign . Growth Securities Risk . Focused Investment Risk
Investment . Value Securities Risk . Leveraging Risk
Risk . Smaller Company Risk . Credit Risk
. Emerging . Liquidity Risk . Management Risk
Market Risk . Derivatives Risk
. Currency
Risk
. Market Risk
. Issuer 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 and the information to its
right show performance of the Fund's Institutional Class shares,
which are offered in a different prospectus. This is because the
Fund did not offer Class A, B or C shares during the periods
shown. Although Institutional Class and Class A, B and C shares
would have similar annual returns (because all the Fund's shares
represent interests in the same portfolio of securities),
Institutional Class performance would be higher than Class A, B or
C performance because of the lower expenses and no sales charges
paid by Institutional Class shares. The Average Annual Total
Returns table also shows estimated historical performance for
Class A, B, and C shares based on the performance of the Fund's
Institutional Class shares, adjusted to reflect the actual sales
charges (loads), distribution and/or service (12b-1) fees,
administrative fees and other expenses paid by Class A, B and C
shares. The performance information on the next page for periods
prior to May 8, 2000 reflects the Fund's advisory fee rate in
effect prior to that date (0.85% per annum), which is higher than
the current rate (0.75% per annum). Prior to November 1, 2000, the
Fund had different sub-advisers 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 November 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.
PIMCO Funds: Multi-Manager Series
27
<PAGE>
PIMCO Allianz Select International Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00-
9/30/00 -14.71%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/01/99-
12/31/99) 47.11%
--------------------
Lowest (7/1/98-
9/30/98) -17.79%
[GRAPH]
1998 39.40%
1999 109.71%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year (12/28/97)(/3/)
---------------------------------------------------------------------
<S> <C> <C>
Institutional Class 109.71% 70.98%
---------------------------------------------------------------------
Class A 97.43% 65.57%
---------------------------------------------------------------------
Class B 102.44% 67.91%
---------------------------------------------------------------------
Class C 106.44% 69.10%
---------------------------------------------------------------------
MSCI EAFEIndex(/1/) 27.30% 23.77%
---------------------------------------------------------------------
Lipper International Fund Average(/2/) 40.76% 25.87%
---------------------------------------------------------------------
</TABLE>
(1) The Morgan Stanley Capital International EAFE (Europe,
Australasia, Far East ("MSCI EAFE") Index is a widely
recognized, unmanaged index of issuers in countries of Europe,
Australia and the Far East. It is not possible to invest
directly in the index.
(2) The Lipper International Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest their assets in securities whose
primary trading markets are outside of the United States. It
does not take into account sales charges.
(3) The Fund began operations on 12/31/97. Index comparisons begin
on 12/31/97.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Contingent Deferred
Sales Charge (Load) (as a
Maximum Sales Charge (Load) Imposed percentage of original
on Purchases (as a percentage of offering price) purchase price)
--------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
--------------------------------------------------------------------------------------------
Class B None 5%(/2/)
--------------------------------------------------------------------------------------------
Class C None 1%(/3/)
--------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees(/1/) (12b-1) Fees(/2/) Expenses(/3/) Expenses
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.75% 0.25% 0.70% 1.70%
------------------------------------------------------------------
Class B 0.75 1.00 0.70 2.45
------------------------------------------------------------------
Class C 0.75 1.00 0.70 2.45
------------------------------------------------------------------
</TABLE>
(1) On May 8, 2000, the Fund's advisory fee rate decreased by
0.10%, to 0.75% per annum.
(2) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(3) Other Expenses reflects a 0.70% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average
daily net assets attributable in the aggregate to the Fund's
Class A, B and C shares in excess of $2.5 billion.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you redeem your shares Example: Assuming you do not
at the end of each period redeem your shares
Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $713 $1,056 $1,422 $2,448 $ 713 $1,056 $1,422 $2,448
-------------------------------------------------------------------------------------------------------
Class B 748 1,064 1,506 2,507 248 764 1,306 2,507
-------------------------------------------------------------------------------------------------------
Class C 348 764 1,306 2.786 248 764 1,306 2,786
-------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 28
<PAGE>
PIMCO Small-Cap Value Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued smaller Capitalization Range
and Seeks long-term capitalization Between $100
Strategies growth of common stocks million and$1.5
capital and billion
income Approximate Number
of Holdings Dividend Frequency
Fund 100 At least annually
Category
Value Stocks
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of between $100 million and $1.5
billion at the time of investment and below average P/E ratios
relative to the market and their respective industry groups. To
achieve income, the Fund invests a portion of its assets in
income-producing (or dividend-paying) common stocks.
The Fund's initial selection universe consists of approximately
4,500 stocks of companies within the Fund's capitalization range.
The portfolio managers screen this universe to identify
approximately 500 undervalued stocks representing approximately
160 industry groups. This screening process is based on a number
of valuation factors, including P/E ratios (calculated both with
respect to trailing operating earnings and forward earnings
estimates) and price-to-sales, price-to-book value, and price-to-
cash flow ratios. These factors are considered both on a relative
basis (compared to other stocks in the same industry group) and on
an absolute basis (compared to the overall market).
From this narrowed universe, the portfolio managers select
approximately 100 stocks for the Fund, each of which has close to
equal weighting in the portfolio. They select stocks based on a
quantitative analysis of factors including price momentum (based
on changes in stock price relative to changes in overall market
prices), earnings momentum (based on analysts' earnings per share
estimates and revisions to those estimates), relative dividend
yields and trading liquidity. The portfolio is also structured to
have a maximum weighting of no more than 10% in any one industry.
The portfolio managers may replace a stock if its market
capitalization becomes excessive, if its valuation exceeds the
average valuation of stocks represented in the S&P 500 Index, or
when a stock within the same industry group has a considerably
lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
<TABLE>
<S> <C> <C>
. Market Risk . Smaller Company Risk . Credit Risk
. Issuer Risk . Liquidity Risk . Management Risk
. Value 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 and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A, B and C shares
(1/20/97), performance information shown in the bar chart and
tables for those classes is based on the performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual sales charges (in the Average
Annual Total Returns table only), distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
A, B and C shares. Past performance is no guarantee of future
results.
29PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Small-Cap Value Fund (continued)
Calendar Year Total Returns -- Class A
More Recent Return
Information
-------------------
1/1/00-
9/30/00 10.65%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
-------------------
Highest (4/1/99-
6/30/99) 16.28%
-------------------
Lowest (7/1/98-
9/30/98) -18.71%
[GRAPH]
1992 18.27%
1993 13.39%
1994 -4.07%
1995 24.98%
1996 27.22%
1997 34.47%
1998 -9.48%
1999 -6.82%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (9/30/91)(/3/)
----------------------------------------------------------------------
<S> <C> <C> <C>
Class A -11.95% 11.25% 10.77%
----------------------------------------------------------------------
Class B -12.08% 11.42% 10.83%
----------------------------------------------------------------------
Class C - 8.39% 11.69% 10.71%
----------------------------------------------------------------------
Russell 2000 Index(/1/) 21.25% 16.69% 14.97%
----------------------------------------------------------------------
Lipper Small-Cap Value Funds
Average(/2/) 5.87% 13.76% 13.08%
----------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stock. It is
not possible to invest directly in the index.
(2) The Lipper Small-Cap Value Funds 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 250% of the dollar-weighted
median market capitalization of the S&P Small-Cap 600 Index.
It does not take into account sales charges.
(3) The Fund began operations on 9/30/91. Index comparisons begin
on 10/1/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.60% 0.25% 0.41% 1.26%
--------------------------------------------------------------------
Class B 0.60 1.00 0.41 2.01
--------------------------------------------------------------------
Class C 0.60 1.00 0.41 2.01
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average
daily net assets attributable in the aggregate to the Fund's
Class A, B and C shares in excess of $2.5 billion, and 0.01% in
other expenses attributed to that class during the most recent
fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $671 $928 $1,204 $1,989 $671 $928 $1,204 $1,989
--------------------------------------------------------------------------------------------------------------
Class B 704 930 1,283 2,048 204 630 1,083 2,048
--------------------------------------------------------------------------------------------------------------
Class C 304 630 1,083 2,338 204 630 1,083 2,338
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus
30
<PAGE>
PIMCO Target Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Medium Capitalization Range
and Seeks capital capitalization Between $1
Strategies appreciation; no common stocks billion and $10
consideration is billion
given to income
Fund Category Approximate Number Dividend Frequency
Growth Stocks of Holdings At least
40-60 annually
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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future.
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 .Liquidity Risk .Focused Investment
.Issuer Risk .Foreign Investment Risk
.Growth Securities Risk .Credit Risk
Risk .Currency Risk .Management Risk
.Smaller Company Risk .Technology Related
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class B shares (5/22/95),
performance information shown in the Average Annual Total Returns
table for that class is based on the performance of the Fund's
Class A shares. The prior Class A performance has been adjusted to
reflect the actual sales charges, distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
B shares. Prior to March 6, 1999, the Fund had a different sub-
adviser and would not necessarily have achieved the performance
results shown on the next page under its current investment
management arrangements. Past performance is no guarantee of
future results.
PIMCO Funds: Multi-Manager Series
31
<PAGE>
PIMCO Target Fund (continued)
Calendar Year Total Returns -- Class A
More Recent Return
Information
--------------------
1/1/00-
9/30/00 40.50%
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]
1993 24.52%
1994 3.09%
1995 30.31%
1996 15.68%
1997 15.44%
1998 23.27%
1999 66.25%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/17/92)(/3/)
-----------------------------------------------------------------------
<S> <C> <C> <C>
Class A 57.10% 28.28% 24.13%
-----------------------------------------------------------------------
Class B 60.05% 28.62% 24.19%
-----------------------------------------------------------------------
Class C 64.05% 28.77% 24.19%
-----------------------------------------------------------------------
S&P Mid-Cap 400 Index(/1/) 14.73% 23.05% 17.55%
-----------------------------------------------------------------------
Lipper Multi-Cap Growth Funds
Average(/2/) 57.98% 28.51% 20.93%
-----------------------------------------------------------------------
</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 Multi-Cap Growth Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges without concentrating in any one market
capitalization range over an extended period of time. Companies
with market capitalizations of less than $5 billion at the time
of investment. It does not take into account sales charges.
(3) The Fund began operations on 12/17/92. Index comparisons begin
on 12/31/92.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.55% 0.25% 0.41% 1.21%
--------------------------------------------------------------------
Class B 0.55 1.00 0.41 1.96
--------------------------------------------------------------------
Class C 0.55 1.00 0.41 1.96
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average
daily net assets attributable in the aggregate to the Fund's
Class A, B and C shares in excess of $2.5 billion, and 0.01%
in other expenses attributable to that class during the most
recent fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $667 $913 $1,178 $1,935 $667 $913 $1,178 $1,935
--------------------------------------------------------------------------------------------------------------
Class B 699 915 1,257 1,995 199 615 1,057 1,995
--------------------------------------------------------------------------------------------------------------
Class C 299 615 1,057 2,285 199 615 1,057 2,285
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus
32
<PAGE>
PIMCO Tax-Efficient Equity Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective A portion of the Capitalization Range
and Seeks maximum common stocks More than $5
Strategies after-tax growth represented in billion
of capital the S&P 500 Index
Fund Category Approximate Number Dividend Frequency
Enhanced Index of Holdings Atleast
More than 200 annually
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 higher 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 Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities Risk . Credit Risk
. Issuer Risk . Leveraging Risk . Management Risk
. Value Securities Risk . 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 and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
Past performance is no guarantee of future results.
PIMCO Funds: Multi-Manager Series
33
<PAGE>
PIMCO Tax-Efficient Equity Fund (continued)
Calendar Year Total Returns -- Class A
More Recent Return
Information
--------------------
1/1/00-9/30/00
2.67%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 14.98%
--------------------
Lowest (7/1/99-
9/30/99) -7.25%
[GRAPH]
1999 17.38%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year (7/10/98)(/3/)
------------------------------------------------------------------------
<S> <C> <C>
Class A 10.95% 11.10%
------------------------------------------------------------------------
Class B 11.49% 11.99%
------------------------------------------------------------------------
Class C 15.49% 14.54%
------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 20.42%
------------------------------------------------------------------------
Lipper Large-Cap Core Funds Average(/2/) 22.77% 20.65%
------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 index is an unmanaged index of large capitalization
U.S. stocks. It is not possible to invest directly in the index.
(2) The Lipper Large-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. 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 A, B or C shares of the Fund:
of the
Fund Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.45% 0.25% 0.41% 1.11%
--------------------------------------------------------------------
Class B 0.45 1.00 0.41 1.86
--------------------------------------------------------------------
Class C 0.45 1.00 0.41 1.86
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average daily
net assets attributable in the aggregate to the Fund's Class A,
B and C shares in excess of $2.5 billion, and 0.01% in other
expenses attributable to that class during the most recent
fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $657 $883 $1,128 $1,827 $657 $883 $1,128 $1,827
--------------------------------------------------------------------------------------------------------------
Class B 689 885 1,206 1,887 189 585 1,006 1,887
--------------------------------------------------------------------------------------------------------------
Class C 289 585 1,006 2,180 189 585 1,006 2,180
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus
34
<PAGE>
PIMCO Value Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate Capitali-
Investments Objective Undervalued zation Range
and Seeks long-term larger More than $5
Strategies growth of capitalization billion
capital and stocks with
income improving Dividend Frequency
fundamentals At least
Fund Category annually
Value Stocks Approximate
Number of
Holdings
40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of more than $5 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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs). In response to unfavorable market and
other conditions, the Fund may make temporary investments of some
or all of its assets in high-quality fixed income securities. This
would be inconsistent with the Fund's investment objective and
principal strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency Risk . Management Risk
. Value Securities Risk . 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 and the information to its
right show performance of the Fund's Class A shares, but the
returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
For periods prior to the inception of Class A, B and C shares
(1/13/97), performance information shown in the bar chart and
tables for those classes is based on the performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual sales charges (in the Average
Annual Total Returns table only), distribution and/or service
(12b-1) fees, administrative fees and other expenses paid by Class
A, B and C shares. 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.
PIMCO Funds: Multi-Manager Series
35
<PAGE>
PIMCO Value Fund (continued)
Calendar Year Total Returns -- Class A
More Recent Return
Information
--------------------
1/1/00-
9/30/00 12.85%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4/1/99-
6/30/99) 17.73%
--------------------
Lowest (7/1/98-
9/30/98) -13.27%
[GRAPH]
1992 12.70%
1993 15.94%
1994 -4.46%
1995 38.37%
1996 19.87%
1997 25.71%
1998 9.76%
1999 3.81%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/30/91)(/3/)
---------------------------------------------------------------------
<S> <C> <C> <C>
Class A -1.90% 17.55% 13.84%
---------------------------------------------------------------------
Class B -1.16% 17.80% 13.91%
---------------------------------------------------------------------
Class C 2.21% 18.02% 13.81%
---------------------------------------------------------------------
Russell 1000 Value Index (/1/) 7.34% 23.08% 17.85%
---------------------------------------------------------------------
Lipper Multi-Cap Value Funds Average
(/2/) 6.69% 18.32% 14.24%
---------------------------------------------------------------------
</TABLE>
(1) The Russell 1000 Value Index is an unmanaged index that
measures the performance of companies in the Russell 1000
Index considered to have less than average growth orientation.
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 the
Fund's comparative index because PIMCO Advisors believes that
the Russell 1000 Value Index is more representative of the
Fund's investment strategies. For periods ended December 31,
1999, the 1 Year, 5 Year and Fund Inception average annual
total returns of the S&P 500 Index were 21.04%, 28.56% and
19.70%, respectively.
(2) The Lipper Multi-Cap Value Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges, without concentrating in any one market
capitalization range over an extended period of time. It does
not take into account sales charges.
(3) The Fund began operations on 12/30/91. Index comparisons begin
on 12/31/91.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Fund:
of the
Fund Shareholder Fees (fees paid directly from your investment)
<TABLE>
<CAPTION>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Class A 5.50% 1%(/1/)
---------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
---------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
---------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A 0.45% 0.25% 0.41% 1.11%
--------------------------------------------------------------------
Class B 0.45 1.00 0.41 1.86
--------------------------------------------------------------------
Class C 0.45 1.00 0.41 1.86
--------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, Class B or Class C shareholders may, depending upon
the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) Other Expenses reflects a 0.40% Administrative Fee paid by the
class, which is subject to a reduction of 0.05% on average
daily net assets attributable in the aggregate to the Fund's
Class A, B and C shares in excess of $2.5 billion, and 0.01% in
other expenses attributable to that class during the most
recent fiscal year.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Fund with the costs
of investing in other mutual funds. The Examples assume that you
invest $10,000 in the noted class of shares for the time periods
indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A $657 $883 $1,128 $1,827 $657 $883 $1,128 $1,827
--------------------------------------------------------------------------------------------------------------
Class B 689 885 1,206 1,887 189 585 1,006 1,887
--------------------------------------------------------------------------------------------------------------
Class C 289 585 1,006 2,180 189 585 1,006 2,180
--------------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus
36
<PAGE>
Summary of Principal Risks
The value of your investment in a Fund changes with the values of
that Fund's investments. Many factors can affect those values. The
factors that are most likely to have a material effect on a
particular Fund's portfolio as a whole are called "principal
risks." The principal risks of each Fund are identified in the
Fund Summaries and are summarized in this section. Each Fund may
be subject to additional principal risks and risks other than
those described below because the types of investments made by a
Fund can change over time. Securities and investment techniques
mentioned in this summary and described in greater detail under
"Characteristics and Risks of Securities and Investment
Techniques" appear in bold type. That section and "Investment
Objectives and Policies" in the Statement of Additional
Information also include more information about the Funds, their
investments and the related risks. There is no guarantee that a
Fund will be able to achieve its investment objective.
Market The market price of securities owned by a Fund may go up or down,
Risk sometimes rapidly or unpredictably. Each of the Funds normally
invests most of its assets in common stocks and/or other equity
securities. A principal risk of investing in each Fund is that the
equity securities in its portfolio will decline in value due to
factors affecting equity securities markets generally or
particular industries represented in those markets. The values of
equity securities may decline due to general market conditions
which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the
general outlook for corporate earnings, changes in interest or
currency rates or adverse investor sentiment generally. They may
also decline due to factors which affect a particular industry or
industries, such as labor shortages or increased production costs
and competitive conditions within an industry. Equity securities
generally have greater price volatility than fixed income
securities.
Issuer The value of a security may also decline for a number of reasons
Risk which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
Value Each Fund may invest in companies that may not be expected to
Securities experience significant earnings growth, but whose securities its
Risk portfolio manager believes are selling at a price lower than their
true value. The Capital Appreciation, Equity Income, Growth &
Income, International, Mid-Cap, Renaissance, Allianz Select
International, Small-Cap Value, Tax-Efficient Equity and Value
Funds may 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, Growth & Income, Innovation, International Mid-Cap,
Opportunity, Select Growth, Allianz Select International, Target
and Tax-Efficient Equity Funds may 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, Innovation, Opportunity and Small-Cap Value
Funds generally have substantial exposure to this risk. The Growth
& Income, Mid-Cap, Allianz Select International and Target Funds
also have significant exposure to this risk because they invest
substantial assets in companies with medium-sized market
capitalizations, which are smaller and generally less-seasoned
than the largest companies.
IPO Risk The Funds, particularly the Global Innovation Fund, may purchase
securities in initial public offerings (IPOs). These securities
are subject to many of the same risks as investing in companies
with smaller market capitalizations. Securities issued in IPOs
have no trading history, and information about the
37 PIMCO Funds: Multi-Manager Series
<PAGE>
companies may be available for very limited periods. In addition,
the prices of securities sold in IPOs may be highly volatile. At
any particular time or from time to time a Fund may not be able to
invest in securities issued in IPOs, or invest to the extent
desired, because, for example, only a small portion (if any) of
the securities being offered in an IPO may be made available to
the Fund. In addition, under certain market conditions a
relatively small number of companies may issue securities in IPOs.
Similarly, as the number of Funds to which IPO securities are
allocated increases, the number of securities issued to any one
Fund may decrease. The investment performance of a Fund during
periods when it is unable to invest significantly or at all in
IPOs may be lower than during periods when the Fund is able to do
so. In addition, as a Fund increases in size, the impact of IPOs
on the Fund's performance will generally decrease.
Liquidity All of the Funds are subject to liquidity risk. Liquidity risk
Risk exists when particular investments are difficult to purchase or
sell, possibly preventing a Fund from selling such illiquid
securities at an advantageous time or price. Funds with principal
investment strategies that involve securities of companies with
smaller market capitalizations, foreign securities, derivatives or
securities with substantial market and/or credit risk tend to have
the greatest exposure to liquidity risk.
Derivatives All Funds except the Capital Appreciation, Mid-Cap and Small-Cap
Risk Value Funds may use derivatives, which are financial contracts
whose value depends on, or is derived from, the value of an
underlying asset, reference rate or index. The various derivative
instruments that the Funds may use are referenced under
"Characteristics and Risks of Securities and Investment
Techniques--Derivatives" in this Prospectus and described in more
detail under "Investment Objectives and Policies" in the Statement
of Additional Information. The Funds may sometimes use derivatives
as part of a strategy designed to reduce exposure to other risks,
such as interest rate or currency risk. The Funds may also use
derivatives for leverage, which increases opportunities for gain
but also involves greater risk of loss due to leveraging risk. A
Fund's use of derivative instruments involves risks different
from, or possibly greater than, the risks associated with
investing directly in securities and other traditional
investments. Derivatives are subject to a number of risks
described elsewhere in this section, such as liquidity risk,
market risk, credit risk and management risk. They also involve
the risk of mispricing or improper valuation and the risk that
changes in the value of the derivative may not correlate perfectly
with the underlying asset, rate or index. In addition, a Fund's
use of derivatives may increase or accelerate the amount of taxes
payable by shareholders. A Fund investing in a derivative
instrument could lose more than the principal amount invested.
Also, suitable derivative transactions may not be available in all
circumstances and there can be no assurance that a Fund will
engage in these transactions to reduce exposure to other risks
when that would be beneficial.
Sector In addition to other risks, Funds that invest a substantial
Specific portion of their assets in related industries (or "sectors") may
Risks have greater risk because companies in these sectors may share
common characteristics and may react similarly to market
developments.
Technology Related Risk. Because the Global Innovation and
Innovation Funds concentrate their investments in companies which
utilize innovative technologies, they are subject to risks
particularly affecting those companies, such as the risks of short
product cycles and rapid obsolescence of products and services,
competition from new and existing companies, significant losses
and/or limited earnings, security price volatility and limited
operating histories. Other Funds may also be subject to these
risks to the extent they invest their assets in technology or
technology-related companies.
Foreign A Fund that invests in foreign securities, and particularly the
(non- Global Innovation, International and Allianz Select International
U.S.) Funds, may experience more rapid and extreme changes in value than
Investment Funds that invest exclusively in securities of U.S. issuers or
Risk securities that trade exclusively in U.S. markets. The securities
markets of many foreign countries are relatively small, with a
limited number of companies representing a small number of
industries. Additionally, issuers of foreign securities are
usually not subject to the same degree of regulation as U.S.
issuers. Reporting, accounting and auditing standards of foreign
countries differ, in some cases significantly, from U.S.
standards. Also, nationalization, expropriation or confiscatory
taxation, currency blockage, political changes or diplomatic
developments could adversely affect a Fund's investments in a
foreign country. In the event of nationalization, expropriation or
other confiscation, a Fund could lose its entire investment in
foreign securities. To the extent that a Fund, such as the Global
Innovation, International or Allianz Select International 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 conditions in certain regions
(such as Southeast Asia) can also adversely affect securities of
other countries whose economies appear to be unrelated. In
addition, special U.S. tax considerations may apply to a Fund's
investment in foreign securities.
Prospectus 38
<PAGE>
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,
International and Allianz Select International Funds may invest
significant portions of their assets in emerging market
securities. In addition, the risks associated with investing in a
narrowly defined geographic area (discussed above under "Foreign
(non-U.S.) Investment Risk") are generally more pronounced with
respect to investments in emerging market countries.
Currency Funds that invest directly in foreign currencies or in securities
Risk that trade in, and receive revenues in, foreign currencies are
subject to the risk that those currencies will decline in value
relative to the U.S. Dollar, or, in the case of hedging positions,
that the U.S. Dollar will decline in value relative to the
currency being hedged. The Global Innovation, International and
Allianz Select International Funds are particularly sensitive to
currency risk. Currency rates in foreign countries may fluctuate
significantly over short periods of time for a number of reasons,
including changes in interest rates, intervention (or the failure
to intervene) by U.S. or foreign governments, central banks or
supranational entities such as the International Monetary Fund, or
by the imposition of currency controls or other political
developments in the U.S. or abroad.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies or regions increases risk. Funds, such as
Risk the Select 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, International and Allianz Select
International Funds may be subject to increased risk to the extent
that they focus their investments in securities denominated in a
particular foreign currency or in a narrowly defined geographic
area outside the U.S., because companies in these areas may share
common characteristics and are often subject to similar business
risks and regulatory burdens, and their securities may react
similarly to economic, market, political or other developments.
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 to the extent they invest a substantial portion of
their assets in companies in related industries such as
"technology" or "financial and business services," which may share
common characteristics, are often subject to similar business
risks and regulatory burdens, and whose securities may react
similarly to economic, market, political or other developments.
Leveraging Leverage, including borrowing, will cause the value of a Fund's
Risk 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 Funds, and in particular the Global Innovation,
International and Tax-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. 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. The Growth & Income Fund is
particularly sensitive to this risk because it may invest in
interest rate sensitive securities such as corporate bonds.
As interest rates rise, the value of fixed income securities in a
Fund's portfolio are likely to decrease. Securities with longer
"durations" (defined below) tend to be more sensitive to changes
in interest rates, usually making them more volatile than
securities with shorter durations. Duration is a measure of the
expected life of a fixed income security that is used to determine
the sensitivity of a security's price to changes in interest
rates. Generally, a Fund with a longer average portfolio duration
will be more sensitive to changes in interest rates than a Fund
with a shorter average portfolio duration.
39 PIMCO Funds: Multi-Manager Series
<PAGE>
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.
High Funds that invest in high yield securities and unrated securities
Yield of similar quality (commonly known as "junk bonds") may be subject
Risk to greater levels of interest rate, credit and liquidity risk than
Funds that do not invest in such securities. The Growth & Income
Fund is particularly susceptible to this risk. These securities
are considered predominantly speculative with respect to the
issuer's continuing ability to make principal and interest
payments. An economic downturn or period of rising interest rates
could adversely affect the market for these securities and reduce
a Fund's ability to sell them.
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.
Prospectus 40
<PAGE>
Management of the Funds
Investment PIMCO Advisors serves as the investment adviser and the
Adviser administrator (serving in its capacity as administrator, the
and "Administrator") for the Funds. Subject to the supervision of the
Admini- Board of Trustees, PIMCO Advisors is responsible for managing,
strator either directly or through others selected by it, the investment
activities of the Funds and the Funds' business affairs and other
administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of September 30, 2000, PIMCO Advisors and its subsidiary
partnerships had approximately $272 billion in assets under
management.
PIMCO Advisors has retained investment management firms ("Sub-
Advisers") to manage each Fund's investments, except that the
PIMCO Equity Advisors division of PIMCO Advisors manages the
investments of the Equity Income, Global Innovation, Growth,
Growth & Income, Innovation, Opportunity, 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 LLC ("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, 2000, 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,
Tax-Efficient Equity and Value Funds 0.45%
Growth Fund 0.50%
International and Target Funds 0.55%
Renaissance, Select Growth and Small-Cap Value
Funds 0.60%*
Growth & Income Fund 0.63%*
Innovation and Opportunity Funds 0.65%
Allianz Select International Fund 0.75%*
</TABLE>
* On April 1, 2000, the advisory fee rate for the Select Growth
Fund increased from 0.57% to 0.60% per annum. On May 8, 2000,
the advisory fee rate for the Allianz Select International Fund
decreased from 0.85% to 0.75% per annum. On August 1, 2000, the
advisory fee rate for the Growth & Income Fund decreased from
0.63% to 0.60% per annum.
The Global Innovation Fund was not operational during the entire
fiscal year ended June 30, 2000. The annual investment advisory
fee rate payable by this Fund is 1.00% (stated as a percentage of
the average daily net assets of the Fund).
Admini- Each Fund pays for the administrative services it requires under a
strative fee structure which is essentially fixed. Class A, Class B and
Fees Class C shareholders of each Fund pay an administrative fee to
PIMCO Advisors, computed as a percentage of the Fund's assets
attributable in the aggregate to those classes of shares. PIMCO
Advisors, in turn, provides or procures administrative services
for Class A, Class B and Class C shareholders and also bears the
costs of most third-party services required by the Funds,
including audit, custodial, portfolio accounting, legal, transfer
agency and printing costs. The Funds do bear other expenses which
are not covered under the administrative fee which may vary and
affect the total level of expenses paid by Class A, Class B and
Class C shareholders, such as brokerage fees, commissions and
other transaction expenses, costs of borrowing money, including
interest expenses, and fees and expenses of the Trust's
disinterested Trustees.
41 PIMCO Funds: Multi-Manager Series
<PAGE>
Class A, B and C shareholders of the Funds pay PIMCO Advisors
monthly administrative fees at the following annual rates (stated
as a percentage of the average daily net assets attributable in
the aggregate to the Fund's Class A, Class B and Class C shares):
<TABLE>
<CAPTION>
Fund Administrative Fees*
-----------------------------------------------------------
<S> <C>
Allianz Select International Fund 0.70%
International Fund 0.65%
Global Innovation Fund 0.60%
Growth & Income Fund 0.50%
All Other Funds 0.40%
</TABLE>
* The Administrative Fee rate for each Fund is subject to a
reduction of 0.05% per year on average daily net assets
attributable in the aggregate to the Fund's Class A, B and C
shares in excess of $2.5 billion.
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 Equity Income, Global Innovation, Growth, Growth & Income,
division of PIMCO Innovation, Opportunity, Renaissance, Select Growth,
Advisors Target and Value
("PIMCO Equity
Advisors")
1345 Avenue of the
Americas, 50th Floor
New York, NY 10105
------------------------------------------------------------------------------------
PIMCO/Allianz Allianz Select International
International Advisors
LLC ("PAIA")
1345 Avenue of the
Americas, 50th Floor
New York, NY 10105
------------------------------------------------------------------------------------
Cadence Capital Capital Appreciation and Mid-Cap
Management ("Cadence")
Exchange Place, 53 State
Street
Boston, MA 02109
------------------------------------------------------------------------------------
NFJ Investment Group Small-Cap Value
("NFJ")
2121 San Jacinto, Suite
1840
Dallas, TX 75201
------------------------------------------------------------------------------------
Parametric Portfolio Tax-Efficient Equity
Associates
("Parametric")
7310 Columbia Center,
701 Fifth Avenue
Seattle, WA 98104
------------------------------------------------------------------------------------
Blairlogie Capital International
Management
("Blairlogie")
4th Floor, 125 Princes
Street
Edinburgh EH2 4AD,
Scotland
</TABLE>
* PIMCO Equity Advisors is a division of PIMCO Advisors. PAIA is a
wholly-owned subsidiary of PIMCO Advisors. With the exception of
Blairlogie, 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. Accounts managed by PIMCO Equity Advisors had combined
assets as of September 30, 2000 of approximately $14.5 billion.
See "Investment Adviser and Administrator" above for additional
information about PIMCO Advisors.
Prospectus
42
<PAGE>
The following individuals at PIMCO Equity Advisors have primary
responsibility for the noted Funds. A different sub-advisory firm
served as Sub-Adviser for the Growth, Innovation, Opportunity and
Target Funds prior to March 6, 1999, for the Renaissance Fund
prior to May 7, 1999, for the Select Growth and Growth & Income
Funds prior to July 1, 1999, and for the Equity Income and Value
Funds prior to May 8, 2000.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since Recent Professional 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 (inception)+ Portfolio Manager of
PIMCO Equity Advisors.
Prior to joining PIMCO
Advisors, he was with
Columbus Circle
Investors from 1991 to
1999, where he managed
equity accounts and
served in various
capacities including as
Portfolio Manager for
the Innovation Fund.
Jiyoung Kim 2000 Senior Research Analyst
for PIMCO Innovation
Fund, where she covers
biotechnology,
telecommunications
equipment,
semiconductors and
networking. Prior to
joining PIMCO Equity
Advisors in 1999, she
was a Senior Research
Analyst at Fred Alger
Management from 1994 to
1999. Prior to that, she
was a Senior Research
Technician at Repligen,
a biopharmaceutical
company.
Growth Mr. Corba 1999 See above.
Growth & Income Mr. Corba 1999 See above.
Peter C. Thoms 2000 Investment Analyst at
Federated Investors from
July 1998 to May 1999.
Previously, he received
his M.B.A. at the
University of Virginia's
Darden School of
Business.
Innovation Mr. McKechnie 1998 See above.
Opportunity Michael F. Gaffney 1999 Managing Director of
PIMCO Equity Advisors,
where he manages the
Opportunity Fund and
other small-cap
products. Prior to
joining PIMCO Advisors,
he was with Alliance
Capital Management L.P.
from 1993 to 1999,
serving in various
capacities including as
Senior Vice President
and Portfolio Manager.
Renaissance John K. Schneider 1999 Senior Portfolio Manager
of PIMCO Equity
Advisors. Prior to
joining PIMCO Advisors,
he was a partner and
Portfolio Manager of
Schneider Capital
Management from 1996 to
1999, where he managed
equity accounts for
various institutional
clients. Prior to that
he was a member of the
Equity Policy Committee
and Director of Research
at Newbold's Asset
Management from 1991 to
1996.
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.
</TABLE>
-------
+ 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.
43 PIMCO Funds: Multi-Manager Series
<PAGE>
PAIA A wholly-owned subsidiary of PIMCO Advisors, PAIA provides
international advisory services to mutual funds. PAIA commenced
operations during the fourth quarter of 2000. Different firms
served as sub-adviser to the Allianz Select International Fund
prior to November 1, 2000.
The following individuals at PAIA share primary responsibility
for the Allianz Select International Fund.
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
-----------------------------------------------------------------------------
<C> <C> <C> <S>
Allianz Udo Frank (lead manager) 2000 Managing Director and
Select Chief Investment Officer
International of Allianz Asset
Advisory and Management
GmbH ("Allianz AAM"),
responsible for the
entire area (since
1997), and Chief
Executive Officer and
Chief Investment Officer
of Allianz PIMCO Asset
Management. Previously,
he served as the Chief
Investment Officer of
Allianz KAG (since
1994).
Wolfram Gerdes (co-manager) 2000 Managing director of
Equity Portfolio
Management at Allianz
AAM since 1998. Prior to
joining Allianz AAM, he
held various positions,
including head of
portfolio management,
with Allianz
Lebensversicherungs AG
from 1992 to 1998.
Gerd Wolfgang Hintz (co-manager) 2000 Managing Director of the
Equity Research
Department at Allianz
AAM since 1998. In
addition, he has been
responsible for Allianz
AAM's trading department
since January 2000.
Previously, he was the
head of Research and
Investor Relations of
Allianz AG.
</TABLE>
Cadence An affiliated subpartnership of PIMCO Advisors, Cadence provides
advisory services to mutual funds and institutional accounts.
Cadence Capital Management Corporation, the predecessor investment
adviser to Cadence, commenced operations in 1988. Accounts managed
by Cadence had combined assets as of September 30, 2000 of
approximately $6.8 billion.
The following individuals at Cadence share primary responsibility
for each of the noted Funds.
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
------------------------------------------------------------------------------------------
<C> <C> <C> <S>
Capital Appreciation David B. Breed 1991 (Inception) Managing Director, Chief
Executive Officer, Chief
Investment Officer and
founding partner of
Cadence. Member of the
Management Board of
PIMCO Advisors. He is a
research generalist and
has lead the team of
portfolio managers and
analysts since 1988. Mr.
Breed has managed
separate equity accounts
for many institutional
clients and has lead the
team that manages the
PIMCO Funds sub-advised
by Cadence since those
Funds' inception dates.
William B. Bannick 1992 Managing Director and
Executive Vice President
at Cadence. Mr. Bannick
is a research generalist
and Senior Portfolio
Manager for the Cadence
team. He has managed
separately managed
equity accounts for
various Cadence
institutional clients
and has been a member of
the team that manages
the PIMCO Funds sub-
advised by Cadence since
joining Cadence in 1992.
Katherine A. Burdon 1993 Managing Director and
Senior Portfolio Manager
at Cadence. Ms. Burdon
is a research generalist
and has managed
separately managed
equity accounts for
various Cadence
institutional clients
and has been a member of
the team that manages
the PIMCO Funds sub-
advised by Cadence since
joining Cadence in 1993.
Peter B. McManus 1994 Director, Account
Management at Cadence.
He has been a member of
the investment team at
Cadence and handles
client relationships of
separately managed
accounts, and has been a
member of the team that
manages the PIMCO Funds
sub-advised by Cadence
since joining Cadence in
1994. Previously, he
served as a Vice
President of Bank of
Boston from 1991 to
1994.
Mid-Cap Messrs. Breed, Bannick and Same as Capital See above.
McManus and Ms. Burdon Appreciation Fund
</TABLE>
NFJ An affiliated sub-partnership of PIMCO Advisors, NFJ provides
advisory services to mutual funds and institutional accounts. NFJ
Investment Group, Inc., the predecessor investment adviser to NFJ,
commenced operations in 1989. Accounts managed by NFJ had combined
assets as of September 30, 2000 of approximately $1.8 billion.
Prospectus 44
<PAGE>
The following individuals at NFJ share primary responsibility for
the noted Fund.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since Recent Profession Experience
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Small-Cap Chris Najork 1991 (Inception) Managing Director and founding partner of NFJ. He has 30 years' experience
Value encompassing equity research and portfolio management. Prior to the formation
Fund of NFJ in 1989, he was a Senior Vice President, Senior Portfolio Manager and
analyst at NationsBank, which he joined in 1974.
Benno J. Fischer 1991 (Inception) Managing Director and founding partner of NFJ. He has 32 years' experience in
portfolio management, investment analysis and research. Prior to the formation
of NFJ in 1989, he was Chief Investment Officer (institutional and fixed
income), Senior Vice President and Senior Portfolio Manager at NationsBank,
which he joined in 1971. Prior to joining NationsBank, Mr. Fischer was a
securities analyst at Chase Manhattan Bank and Clark, Dodge.
Paul A. Magnuson 1995 Principal at NFJ. He is a Portfolio Manager and Senior Research Analyst with
14 years' experience in equity analysis and portfolio management. Prior to
joining NFJ in 1992, he was an Assistant Vice President at NationsBank, which
he joined in 1985. Within the Trust Investment Quantitative Services Division
of NationsBank, he was responsible for equity analytics and structured fund
management.
</TABLE>
Parametric An affiliated sub-partnership of PIMCO Advisors, Parametric
provides advisory services to mutual funds and institutional
accounts. Parametric Portfolio Associates, Inc., the predecessor
investment adviser to Parametric, commenced operations in 1987.
Accounts managed by Parametric had combined assets as of September
30, 2000 of approximately $4.4 billion.
The following individuals at Parametric share primary
responsibility for the Tax-Efficient Equity Fund.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since Recent Professional Experience
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tax- David Stein 1998 (Inception) Managing Director of Parametric. He has been with Parametric since 1996 where
Efficient he leads the investment, research and product development activities.
Equity Previously, he served in Investment Research at GTE Corporation from 1995 to
1996, in Equity Research at Vanguard Group from 1994 to 1995 and in Investment
Research at IBM Corporation from 1977 to 1994.
Tom Seto 1998 (Inception) Vice President and Portfolio Manager of Parametric. Since joining Parametric
in 1998, he has been responsible for management of Parametric's active U.S.
equity strategies and has managed structured equity portfolios. Previously, he
was with Barclays Global Investors from 1991 to 1998, serving in various
capacities including as head of U.S. Equity Index Investments and Portfolio
Manager.
</TABLE>
Blairlogie Blairlogie provides advisory services to mutual funds and
institutional accounts. Blairlogie Capital Management Ltd., the
predecessor investment adviser to Blairlogie, commenced operations
in 1992. Accounts managed by Blairlogie had combined assets as of
September 30, 2000 of approximately $1.0 billion.
Blairlogie is an indirect majority-owned subsidiary of the
Alleghany Corporation, and is not an affiliate of PIMCO Advisors.
Blairlogie was formerly an affiliated sub-partnership of PIMCO
Advisors. On April 30, 1999, PIMCO Advisors sold all of its
ownership interest in Blairlogie to subsidiaries of the Alleghany
Corporation. PIMCO Advisors retained Blairlogie as the Sub-Adviser
of the International Fund both prior and subsequent to this
transaction.
The following individual at Blairlogie has primary responsibility
for the International Fund.
<TABLE>
<CAPTION>
Fund Portfolio Manager Since Recent Professional Experience
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
International James Smith 1994 Chief Investment Officer of Blairlogie since 1992, responsible for setting
investment policy, asset allocation, managing the investment team and stock
selection in Latin America.
</TABLE>
Adviser/Sub- Shareholders of each Fund (except the Innovation and Mid-Cap
Adviser Funds) have approved a proposal permitting PIMCO Advisors to enter
Relationship into new or amended sub-advisory agreements with one or more sub-
advisers with respect to each Fund without obtaining shareholder
approval of such agreements, subject to the conditions of an
exemptive order that has been granted by the Securities and
Exchange Commission. One of the conditions requires the Board of
Trustees to approve any such agreement. In addition, the exemptive
order prohibits PIMCO Advisors from entering into sub-advisory
agreements with affiliates of PIMCO Advisors without shareholder
approval, unless those affiliates are substantially wholly-owned
by PIMCO Advisors. PIMCO Advisors has the ultimate responsibility
to oversee the Sub-Advisers and to recommend their hiring,
termination and replacement.
Distributor The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stanford, CT 06902, is a broker-dealer
registered with the Securities and Exchange Commission.
45 PIMCO Funds: Multi-Manager Series
<PAGE>
Investment Options -- Class A, B and C Shares
The Trust offers investors Class A, Class B and Class C shares of
each Fund in this Prospectus. Each class of shares is subject to
different types and levels of sales charges than the other classes
and bears a different level of expenses.
The class of shares that is best for you depends upon a number of
factors, including the amount and the intended length of your
investment. The following summarizes key information about each
class to help you make your investment decision, including the
various expenses associated with each class. More extensive
information about the Trust's multi-class arrangements is included
in the PIMCO Funds Shareholders' Guide for Class A, B and C Shares
(the "Guide"), which is included as part of the Statement of
Additional Information and can be obtained free of charge from the
Distributor. See "How to Buy and Sell Shares--PIMCO Funds
Shareholders' Guide" below.
Class A . You pay an initial sales charge of up to 5.50% when you buy
Shares Class A shares. The sales charge is deducted from your
investment so that not all of your purchase payment is invested.
. You may be eligible for a reduction or a complete waiver of the
initial sales charge under a number of circumstances. For
example, you normally pay no sales charge if you purchase
$1,000,000 or more of Class A shares. Please see the Guide for
details.
. Class A shares are subject to lower 12b-1 fees than Class B or
Class C shares. Therefore, Class A shareholders generally pay
lower annual expenses and receive higher dividends than Class B
or Class C shareholders.
. You normally pay no contingent deferred sales charge ("CDSC")
when you redeem Class A shares, although you may pay a 1% CDSC
if you purchase $1,000,000 or more of Class A shares (and
therefore pay no initial sales charge) and then redeem the
shares during the first 18 months after your initial purchase.
The Class A CDSC is waived for certain categories of investors
and does not apply if you are otherwise eligible to purchase Class
A shares without a sales charge. Please see the Guide for details.
Class B . You do not pay an initial sales charge when you buy Class B
Shares shares. The full amount of your purchase payment is invested
initially.
. You normally pay a CDSC of up to 5% if you redeem Class B shares
during the first six years after your initial purchase. The
amount of the CDSC declines the longer you hold your Class B
shares. You pay no CDSC if you redeem during the seventh year
and thereafter. The Class B CDSC is waived for certain categories
of investors. Please see the Guide for details.
. Class B shares are subject to higher 12b-1 fees than Class A
shares for the first seven years they are held. During this
time, Class B shareholders normally pay higher annual expenses
and receive lower dividends than Class A shareholders.
. Class B shares automatically convert into Class A shares after
they have been held for seven years. After the conversion takes
place, the shares are subject to the lower 12b-1 fees paid by
Class A shares.
Class C . You do not pay an initial sales charge when you buy Class C
Shares shares. The full amount of your purchase payment is invested
initially.
. You normally pay a CDSC of 1% if you redeem Class C shares
during the first year after your initial purchase. The Class C
CDSC is waived for certain categories of investors. Please see
the Guide for details.
. Class C shares are subject to higher 12b-1 fees than Class A
shares. Therefore, Class C shareholders normally pay higher
annual expenses and receive lower dividends than Class A
shareholders.
. Class C shares do not convert into any other class of shares.
Because Class B shares convert into Class A shares after seven
years, Class C shares will normally be subject to higher
expenses and will pay lower dividends than Class B shares if the
shares are held for more than seven years.
The following provides additional information about the sales
charges and other expenses associated with Class A, Class B and
Class C shares.
Prospectus
46
<PAGE>
--------------------------------------------------------------------------------
Initial Unless you are eligible for a waiver, the public offering price
Sales you pay when you buy Class A shares of the Funds is the net asset
Charges-- value ("NAV") of the shares plus an initial sales charge. The
Class A initial sales charge varies depending upon the size of your
Shares purchase, as set forth below. No sales charge is imposed where
Class A shares are issued to you pursuant to the automatic
reinvestment of income dividends or capital gains distributions.
All Funds
<TABLE>
<CAPTION>
Initial Sales Charge Initial Sales Charge
Amount of as % of Net as % of Public
Purchase Amount Invested Offering Price
----------------------------------------------------------------------
<S> <C> <C>
$0-$49,999 5.82% 5.50%
----------------------------------------------------------------------
$50,000-$99,999 4.71% 4.50%
----------------------------------------------------------------------
$100,000-$249,999 3.63% 3.50%
----------------------------------------------------------------------
$250,000-$499,999 2.56% 2.50%
----------------------------------------------------------------------
$500,000-$999,999 2.04% 2.00%
----------------------------------------------------------------------
$1,000,000 + 0.00%* 0.00%*
----------------------------------------------------------------------
*As shown, investors that purchase $1,000,000 or more of any
Fund's Class A shares will not pay any initial sales charge on the
purchase. However, purchasers of $1,000,000 or more of Class A
shares may be subject to a CDSC of 1% if the shares are redeemed
during the first 18 months after their purchase. See "CDSCs on
Class A Shares" below.
-------------------------------------------------------------------------------
Contingent Unless you are eligible for a waiver, if you sell (redeem) your
Deferred Class B or Class C shares within the time periods specified below,
Sales you will pay a CDSC according to the following schedules.
Charges
(CDSCs)
-- Class
B and
Class C
Shares
Class B Years Since Purchase Percentage Contingent
Shares Payment was Made Deferred Sales Charge
----------------------------------------------------------------------
First 5
----------------------------------------------------------------------
Second 4
----------------------------------------------------------------------
Third 3
----------------------------------------------------------------------
Fourth 3
----------------------------------------------------------------------
Fifth 2
----------------------------------------------------------------------
Sixth 1
----------------------------------------------------------------------
Seventh 0*
----------------------------------------------------------------------
*After the seventh year, Class B shares convert into Class A
shares.
Class C Years Since Purchase Percentage Contingent
Shares Payment was Made Deferred Sales Charge
----------------------------------------------------------------------
First 1
----------------------------------------------------------------------
Thereafter 0
----------------------------------------------------------------------
</TABLE>
--------------------------------------------------------------------------------
CDSCs on Unless a waiver applies, investors who purchase $1,000,000 or more
Class A of Class A shares (and, thus, pay no initial sales charge) will be
Shares subject to a 1% CDSC if the shares are redeemed within 18 months
of their purchase. The Class A CDSC does not apply if you are
otherwise eligible to purchase Class A shares without an initial
sales charge or if you are eligible for a waiver of the CDSC. See
"Reductions and Waivers of Initial Sales Charges and CDSCs" below.
--------------------------------------------------------------------------------
How CDSCs A CDSC is imposed on redemptions of Class B and Class C shares
are (and where applicable, Class A shares) on the amount of the
Calculated redemption which causes the current value of your account for the
particular class of shares of a Fund to fall below the total
dollar amount of your purchase payments subject to the CDSC.
However, no CDSC is imposed if the shares redeemed have been
acquired through the reinvestment of dividends or capital gains
distributions or if the amount redeemed is derived from increases
in the value of your account above the amount of the purchase
payments subject to the CDSC. CDSCs are deducted from the proceeds
of your redemption, not from amounts remaining in your account. In
determining whether a CDSC is payable, it is assumed that the
purchase payment from which the redemption is made is the earliest
purchase payment for the particular class of shares in your
account (from which a redemption or exchange has not already been
effected).
47 PIMCO Funds: Multi-Manager Series
<PAGE>
For instance, the following example illustrates the operation of
the Class B CDSC:
. Assume that an individual opens an account and makes a purchase
payment of $10,000 for Class B shares of a Fund and that six
months later the value of the investor's account for that Fund
has grown through investment performance and reinvestment of
distributions to $11,000. The investor then may redeem up to
$1,000 from that Fund ($11,000 minus $10,000) without incurring
a CDSC. If the investor should redeem $3,000, a CDSC would be
imposed on $2,000 of the redemption (the amount by which the
investor's account for the Fund was reduced below the amount of
the purchase payment). At the rate of 5%, the Class B CDSC would
be $100.
In determining whether an amount is available for redemption
without incurring a CDSC, the purchase payments made for all
shares of a particular class of a Fund in the shareholder's
account are aggregated, and the current value of all such shares
is aggregated.
--------------------------------------------------------------------------------
Reductions The initial sales charges on Class A shares and the CDSCs on Class
and A, Class B and Class C shares may be reduced or waived under
Waivers certain purchase arrangements and for certain categories of
of investors. Please see the Guide for details. The Guide is
Initial available free of charge from the Distributor. See "How to Buy and
Sales Sell Shares--PIMCO Funds Shareholders' Guide" below.
Charges
and CDSCs
--------------------------------------------------------------------------------
Distribu- The Funds pay fees to the Distributor on an ongoing basis as
tion compensation for the services the Distributor renders and the
and expenses it bears in connection with the sale and distribution of
Servicing Fund shares ("distribution fees") and/or in connection with
(12b-1) personal services rendered to Fund shareholders and the
Plans maintenance of shareholder accounts ("servicing fees"). These
payments are made pursuant to Distribution and Servicing Plans
("12b-1 Plans") adopted by each Fund pursuant to Rule 12b-1 under
the Investment Company Act of 1940.
There is a separate 12b-1 Plan for each class of shares offered
in this Prospectus. Class A shares pay only servicing fees. Class
B and Class C shares pay both distribution and servicing fees. The
following lists the maximum annual rates at which the distribution
and/or servicing fees may be paid under each 12b-1 Plan
(calculated as a percentage of each Fund's average daily net
assets attributable to the particular class of shares):
<TABLE>
<CAPTION>
Servicing Distribution
All Funds Fee Fee
---------------------------------------------------------------------------------------
<S> <C> <C>
Class A 0.25% None
---------------------------------------------------------------------------------------
Class B 0.25% 0.75%
---------------------------------------------------------------------------------------
Class C 0.25% 0.75%
---------------------------------------------------------------------------------------
</TABLE>
Because 12b-1 fees are paid out of a Fund's assets on an ongoing
basis, over time these fees will increase the cost of your
investment and may cost you more than sales charges which are
deducted at the time of investment. Therefore, although Class B
and Class C shares do not pay initial sales charges, the
distribution fees payable on Class B and Class C shares may, over
time, cost you more than the initial sales charge imposed on Class
A shares. Also, because Class B shares convert into Class A shares
after they have been held for seven years and are not subject to
distribution fees after the conversion, an investment in Class C
shares may cost you more over time than an investment in Class B
shares.
How Fund Shares Are Priced
The net asset value ("NAV") of a Fund's Class A, Class B and Class
C shares is determined by dividing the total value of a Fund's
portfolio investments and other assets attributable to that class,
less any liabilities, by the total number of shares outstanding of
that class.
For purposes of calculating the NAV, portfolio securities and
other assets for which market quotes are available are stated at
market value. Market value is generally determined on the basis of
last reported sales prices, or if no sales are reported, based on
quotes obtained from a quotation reporting system, established
market makers, or pricing services. Certain securities or
investments for which daily market quotes are not readily
available may be valued, pursuant to procedures 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
Prospectus 48
<PAGE>
market quotes are not readily available are valued at fair value
as determined in good faith by the Board of Trustees or persons
acting at their direction.
Investments initially valued in currencies other than the U.S.
dollar are converted to U.S. dollars using exchange rates obtained
from pricing services. As a result, the NAV of a Fund's shares may
be affected by changes in the value of currencies in relation to
the U.S. dollar. The value of securities traded in markets outside
the United States or denominated in currencies other than the U.S.
dollar may be affected significantly on a day that the New York
Stock Exchange is closed and an investor is not able to purchase,
redeem or exchange shares. In particular, calculation of the NAV
of the Global Innovation, International and Allianz Select
International Funds may not take place contemporaneously with the
determination of the prices of foreign securities used in NAV
calculations.
Fund shares are valued at the close of regular trading (normally
4:00 p.m., Eastern time) (the "NYSE Close") on each day that the
New York Stock Exchange is open. For purposes of calculating the
NAV, the Funds normally use pricing data for domestic equity
securities received shortly after the NYSE Close and do not
normally take into account trading, clearances or settlements that
take place after the NYSE Close. 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 or persons acting at their direction 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 shares of the Funds.
PIMCO More detailed information about the Trust's purchase, sale and
Funds exchange arrangements for Fund shares is provided in the PIMCO
Share- Funds Shareholders' Guide, which is included in the Statement of
holders' Additional Information and can be obtained free of charge from the
Guide Distributor by written request or by calling 1-800-426-0107. The
Guide provides technical information about the basic arrangements
described below and also describes special purchase, sale and
exchange features and programs offered by the Trust, including:
. Automated telephone and wire transfer procedures
. Automatic purchase, exchange and withdrawal programs
. Programs that establish a link from your Fund account to your
bank account
. Special arrangements for tax-qualified retirement plans
. Investment programs which allow you to reduce or eliminate the
initial sales charges on Class A shares
. Categories of investors that are eligible for waivers or
reductions of initial sales charges and CDSCs
Calculation When you buy shares of the Funds, you pay a price equal to the NAV
of Share of the shares, plus any applicable sales charge. When you sell
Price and (redeem) shares, you receive an amount equal to the NAV of the
Redemption shares, minus any applicable CDSC. NAVs are determined at the
Payments close of regular trading (normally, 4:00 p.m., Eastern time) on
the New York Stock Exchange on each day the New York Stock
Exchange is open. See "How Fund Shares Are Priced" above for
details. Generally, purchase and redemption orders for Fund shares
are processed at the NAV next calculated after your order is
received by the Distributor. There are certain exceptions where an
order is received by a broker or dealer prior to the close of
regular trading on the New York Stock Exchange and then
transmitted to the Distributor after the NAV has been calculated
for that day (in which case the order may be processed at that
day's NAV). Please see the Guide for details.
The Trust does not calculate NAVs or process orders on days when
the New York Stock Exchange is closed. If your purchase or
redemption order is received by the Distributor on a day when the
New York Stock Exchange is closed, it will be processed on the
next succeeding day when the New York Stock Exchange is open (at
the succeeding day's NAV).
49 PIMCO Funds: Multi-Manager Series
<PAGE>
Buying You can buy Class A, Class B or Class C shares of the Funds in the
Shares following ways:
. Through your broker, dealer or other financial intermediary.
Your broker, dealer or other intermediary may establish higher
minimum investment requirements than the Trust and may also
independently charge you transaction fees and additional
amounts (which may vary) in return for its services, which will
reduce your return. Shares you purchase through your broker,
dealer or other intermediary will normally be held in your
account with that firm.
. Directly from the Trust. To make direct investments, you must
open an account with the Distributor and send payment for your
shares either by mail or through a variety of other purchase
options and plans offered by the Trust.
If you wish to invest directly by mail, please send a check
payable to PIMCO Funds Distributors LLC, along with a completed
application form to:
PIMCO Funds Distributors LLC
P.O. Box 9688
Providence, RI 02940-0926
The Trust accepts all purchases by mail subject to collection of
checks at full value and conversion into federal funds. You may
make subsequent purchases by mailing a check to the address above
with a letter describing the investment or with the additional
investment portion of a confirmation statement. Checks for
subsequent purchases should be payable to PIMCO Funds Distributors
LLC and should clearly indicate your account number. Please call
the Distributor at 1-800-426-0107 if you have any questions
regarding purchases by mail.
The Guide describes a number of additional ways you can make
direct investments, including through the PIMCO Funds Auto-Invest
and PIMCO Funds Fund Link programs. You can obtain a Guide free of
charge from the Distributor by written request or by calling 1-
800-426-0107. See "PIMCO Funds Shareholders' Guide" above.
The Distributor, in its sole discretion, may accept or reject any
order for purchase of Fund shares. No share certificates will be
issued unless specifically requested in writing.
Investment The following investment minimums apply for purchases of Class A,
Minimums Class B and Class C shares.
<TABLE>
<CAPTION>
Initial Investment Subsequent Investments
------------------ ----------------------
<S> <C>
$2,500 per Fund $100 per Fund
</TABLE>
Lower minimums may apply for certain categories of investors,
including certain tax-qualified retirement plans, and for special
investment programs and plans offered by the Trust, such as the
PIMCO Funds Auto-Invest and PIMCO Funds Fund Link programs. Please
see the Guide for details.
Small Because of the disproportionately high costs of servicing accounts
Account with low balances, if you have a direct account with the
Fee Distributor, you will be charged a fee at the annual rate of $16
if your account balance for any Fund falls below a minimum level
of $2,500, except for Uniform Gift to Minors, IRA, Roth IRA and
Auto-Invest accounts for which the limit is $1,000. The fee also
applies to employer-sponsored retirement plan accounts, Money
Purchase and/or Profit Sharing plans, 401(k) plans, 403(b)(7)
custodial accounts, SIMPLE IRAs, SEPs and SAR/SEPs. (A separate
custodial fee may apply to IRAs, Roth IRAs and other retirement
accounts.) However, you will not be charged this fee if the
aggregate value of all of your PIMCO Funds accounts is at least
$50,000. Any applicable small account fee will be deducted
automatically from your below-minimum Fund account in quarterly
installments and paid to the Administrator. Each Fund account will
normally be valued, and any deduction taken, during the last five
business days of each calendar quarter. Lower minimum balance
requirements and waivers of the small account fee apply for
certain categories of investors. Please see the Guide for details.
Minimum Due to the relatively high cost to the Funds of maintaining small
Account accounts, you are asked to maintain an account balance in each
Size Fund in which you invest of at least the minimum investment
necessary to open the particular type of account. If your balance
for any Fund remains below the minimum for three months or longer,
the Administrator has the right (except in the case of employer-
sponsored retirement accounts) to redeem your remaining shares and
close that Fund account after giving you 60 days to increase your
balance. Your Fund account will not be liquidated if the reduction
in size is due solely to a decline in market value of your Fund
shares or if the aggregate value of all your PIMCO Funds accounts
exceeds $50,000.
Prospectus 50
<PAGE>
Exchanging Except as provided below and/or in the applicable Funds' or
Shares series' prospectus(es), you may exchange your Class A, Class B or
Class C shares of any Fund for the same Class of shares of any
other Fund or of another series of the Trust or PIMCO Funds:
Pacific Investment Management Series. Shares are exchanged on the
basis of their respective NAVs next calculated after your exchange
order is received by the Distributor. Currently, the Trust does
not charge any exchange fees or charges. Exchanges are subject to
the $2,500 minimum initial purchase requirements for each Fund,
except with respect to tax-qualified programs and exchanges
effected through the PIMCO Funds Auto-Exchange plan. In addition,
an exchange is generally a taxable event which will generate
capital gains or losses, and special rules may apply in computing
tax basis when determining gain or loss. If you maintain your
account with the Distributor, you may exchange shares by
completing a written exchange request and sending it to PIMCO
Funds Distributors LLC, P.O. Box 9688, Providence, RI 02940-0926.
You can get an exchange form by calling the Distributor at 1-800-
426-0107.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Fund and its shareholders. In particular, a pattern of
exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Fund. Currently, the Trust limits the number of "round
trip" exchanges an investor may make. An investor makes a "round
trip" exchange when the investor purchases shares of a particular
Fund, subsequently exchanges those shares for shares of a
different PIMCO Fund and then exchanges back into the originally
purchased Fund. The Trust has the right to refuse any exchange for
any investor who completes (by making the exchange back into the
shares of the originally purchased Fund) more than six round trip
exchanges in any twelve-month period. Although the Trust has no
current intention of terminating or modifying the exchange
privilege other than as set forth in the preceeding sentence, it
reserves the right to do so at any time. Except as otherwise
permitted by the Securities and Exchange Commission, the Trust
will give you 60 days' advance notice if it exercises its right to
terminate or materially modify the exchange privilege with respect
to Class A, B and C shares.
The Guide provides more detailed information about the exchange
privilege, including the procedures you must follow and additional
exchange options. You can obtain a Guide free of charge from the
Distributor by written request or by calling 1-800-426-0107. See
"PIMCO Funds Shareholders' Guide" above.
Selling You can sell (redeem) Class A, Class B or Class C shares of the
Shares Funds in the following ways:
. Through your broker, dealer or other financial intermediary.
Your broker, dealer or other intermediary may independently charge
you transaction fees and additional amounts (which may vary) in
return for its services, which will reduce your return.
. Directly from the Trust by Written Request. To redeem shares
directly from the Trust by written request (whether or not the
shares are represented by certificates), you must send the
following items to the Trust's Transfer Agent, PFPC, Inc., P.O.
Box 9688, Providence, RI 02940-0926:
(1) a written request for redemption signed by all registered
owners exactly as the account is registered on the Transfer
Agent's records, including fiduciary titles, if any, and
specifying the account number and the dollar amount or number of
shares to be redeemed;
(2) for certain redemptions described below, a guarantee of all
signatures on the written request or on the share certificate or
accompanying stock power, if required, as described under
"Signature Guarantee" below;
(3) any share certificates issued for any of the shares to be
redeemed (see "Certificated Shares" below); and
(4) any additional documents which may be required by the
Transfer Agent for redemption by corporations, partnerships or
other organizations, executors, administrators, trustees,
custodians or guardians, or if the redemption is requested by
anyone other than the shareholder(s) of record. Transfers of
shares are subject to the same requirements.
A signature guarantee is not required for redemptions requested
by and payable to all shareholders of record for the account that
is to be sent to the address of record for that account. To avoid
delay in redemption or transfer, if you have any questions about
these requirements you should contact the Transfer Agent in
writing or call 1-800-426-0107 before submitting a request.
Written redemption or
transfer requests will not be honored until all required documents
in the proper form have been received by the Transfer Agent. You
can not redeem your shares by written request to the Trust if they
are held in broker "street name" accounts--you must redeem through
your broker.
If the proceeds of your redemption (i) are to be paid to a person
other than the record owner, (ii) are to be sent to an address
other than the address of the account on the Transfer Agent's
records,
51 PIMCO Funds: Multi-Manager Series
<PAGE>
or (iii) are to be paid to a corporation, partnership, trust or
fiduciary, the signature(s) on the redemption request and on the
certificates, if any, or stock power must be guaranteed as
described under "Signature Guarantee" below. The Distributor may,
however, waive the signature guarantee requirement for redemptions
up to $2,500 by a trustee of a qualified retirement plan, the
administrator for which has an agreement with the Distributor.
The Guide describes a number of additional ways you can redeem
your shares, including:
. Telephone requests to the Transfer Agent
. PIMCO Funds Automated Telephone System (ATS)
. Expedited wire transfers
. Automatic Withdrawal Plan
. PIMCO Funds Fund Link
Unless you specifically elect otherwise, your initial account
application permits you to redeem shares by telephone subject to
certain requirements. To be eligible for ATS, expedited wire
transfer, Automatic Withdrawal Plan, and Fund Link privileges, you
must specifically elect the particular option on your account
application and satisfy certain other requirements. The Guide
describes each of these options and provides additional
information about selling shares. You can obtain a Guide free of
charge from the Distributor by written request or by calling 1-
800-426-0107.
Other than an applicable CDSC, you will not pay any special fees
or charges to the Trust or the Distributor when you sell your
shares. However, if you sell your shares through your broker,
dealer or other financial intermediary, that firm may charge you a
commission or other fee for processing your redemption request.
Redemptions of Fund shares may be suspended when trading on the
New York Stock Exchange is restricted or during an emergency which
makes it impracticable for the Funds to dispose of their
securities or to determine fairly the value of their net assets,
or during any other period as permitted by the Securities and
Exchange Commission for the protection of investors. Under these
and other unusual circumstances, the Trust may suspend redemptions
or postpone payments for more than seven days, as permitted by
law.
Timing of Redemption proceeds will normally be mailed to the redeeming
Redemption shareholder within seven calendar days or, in the case of wire
Payments transfer or Fund Link redemptions, sent to the designated bank
account within one business day. Fund Link redemptions may be
received by the bank on the second or third business day. In cases
where shares have recently been purchased by personal check,
redemption proceeds may be withheld until the check has been
collected, which may take up to 15 days. To avoid such
withholding, investors should purchase shares by certified or bank
check or by wire transfer. Under unusual circumstances, the Trust
may delay your redemption payments for more than seven days, as
permitted by law.
Redemptions The Trust has agreed to redeem shares of each Fund solely in cash
In Kind up to the lesser of $250,000 or 1% of the Fund's net assets during
any 90-day period for any one shareholder. In consideration of the
best interests of the remaining shareholders, the Trust may pay
any redemption proceeds exceeding this amount in whole or in part
by a distribution in kind of securities held by a Fund in lieu of
cash. Except for Funds with a tax-efficient management strategy,
it is highly unlikely that your shares would ever be redeemed in
kind. If your shares are redeemed in kind, you should expect to
incur transaction costs upon the disposition of the securities
received in the distribution.
Certifi- If you are redeeming shares for which certificates have been
cated issued, the certificates must be mailed to or deposited with the
Shares Trust, duly endorsed or accompanied by a duly endorsed stock power
or by a written request for redemption. Signatures must be
guaranteed as described under "Signature Guarantee" below. The
Trust may request further documentation from institutions or
fiduciary accounts, such as corporations, custodians (e.g., under
the Uniform Gifts to Minors Act), executors, administrators,
trustees or guardians. Your redemption request and stock power
must be signed exactly as the account is registered, including
indication of any special capacity of the registered owner.
Signature When a signature guarantee is called for, you should have
Guarantee "Signature Guaranteed" stamped under your signature and guaranteed
by any of the following entities: U.S. banks, foreign banks having
a U.S. correspondent bank, credit unions, savings associations,
U.S. registered dealers and brokers, municipal securities dealers
and brokers, government securities dealers and brokers, national
securities
Prospectus
52
<PAGE>
exchanges, registered securities associations and clearing
agencies (each an "Eligible Guarantor Institution"). The
Distributor reserves the right to reject any signature guarantee
pursuant to its written signature guarantee standards or
procedures, which may permit it to reject signature guarantees
from Eligible Guarantor Institutions that do not, based on credit
guidelines, satisfy such written standards or procedures.
Beginning January 1, 2001, when a signature guarantee is called
for, a "medallion" signature guarantee will be required. A
medallion signature guarantee may be obtained from a domestic bank
or trust company, broker, dealer, clearing agency, savings
association or other financial institution which is participating
in a medallion program recognized by the Securities Transfer
Association. The three recognized medallion programs are the
Securities Transfer Agents Medallion Program (STAMP), Stock
Exchanges Medallion Program (SEMP) and New York Stock Exchange,
Inc. Medallion Signature Program (NYSE MSP). Signature guarantees
from financial institutions which are not participating in one of
these programs will not be accepted. Please note that financial
institutions participating in a recognized medallion program may
still be ineligible to provide a signature guarantee for
transactions of greater than a specified dollar amount. The Trust
may change the signature guarantee requirements from time to time
upon notice to shareholders, which may be given by means of a new
or supplemented Prospectus or a new supplemented Guide.
Shareholders should contact the Distributor for additional details
regarding the Funds' signature guarantee requirements.
Fund Distributions
Each Fund distributes substantially all of its net investment
income to shareholders in the form of dividends. You begin earning
dividends on Fund shares the day after the Trust receives your
purchase payment. Dividends paid by each Fund with respect to each
class of shares are calculated in the same manner and at the same
time, but dividends on Class B and Class C shares are expected to
be lower than dividends on Class A shares as a result of the
distribution fees applicable to Class B and Class C shares. The
following shows when each Fund intends to declare and distribute
income dividends to shareholders of record.
<TABLE>
<CAPTION>
Fund At Least Annually Quarterly
---------------------------------------------------------------------
<S> <C> <C>
Equity Income Fund .
---------------------------------------------------------------------
All other Funds .
---------------------------------------------------------------------
</TABLE>
In addition, each Fund distributes any net capital gains it earns
from the sale of portfolio securities to shareholders no less
frequently than annually. Net short-term capital gains may be paid
more frequently.
You can choose from the following distribution options:
. Reinvest all distributions in additional shares of the same
class of your Fund at NAV. This will be done unless you elect
another option.
. Invest all distributions in shares of the same class of any
other Fund or another series of the Trust or PIMCO Funds:
Pacific Investment Management Series which offers that class at
NAV. You must have an account existing in the Fund or series
selected for investment with the identical registered name. You
must elect this option on your account application or by a
telephone request to the Transfer Agent at 1-800-426-0107.
. Receive all distributions in cash (either paid directly to you
or credited to your account with your broker or other financial
intermediary). You must elect this option on your account
application or by a telephone request to the Transfer Agent at 1-
800-426-0107.
You do not pay any sales charges on shares you receive through
the reinvestment of Fund distributions.
If you elect to receive Fund distributions in cash and the postal
or other delivery service is unable to deliver checks to your
address of record, the Trust's Transfer Agent will hold the
returned checks for your benefit in a non-interest bearing
account.
For further information on distribution options, please contact
your broker or call the Distributor at 1-800-426-0107.
53 PIMCO Funds: Multi-Manager Series
<PAGE>
Tax Consequences
. Taxes on Fund distributions. If you are subject to U.S. federal
income tax, you will be subject to tax on Fund distributions
whether you received them in cash or reinvested them in additional
shares of the Funds. For federal income tax purposes, Fund
distributions will be taxable to you as either ordinary income or
capital gains.
Fund dividends (i.e., distributions of investment income) are
taxable to you as ordinary income. Federal taxes on Fund
distributions of gains are determined by how long the Fund owned
the investments that generated the gains, rather than how long you
have owned your shares. Distributions of gains from investments
that a Fund owned for more than 12 months will generally be
taxable to you as capital gains. Distributions of gains from
investments that the Fund owned for 12 months or less will
generally be taxable to you as ordinary income.
Fund distributions are taxable to you even if they are paid from
income or gains earned by a Fund prior to your investment and thus
were included in the price you paid for your shares. For example,
if you purchase shares on or just before the record date of a Fund
distribution, you will pay full price for the shares and may
receive a portion of your investment back as a taxable
distribution.
. Taxes when you sell (redeem) or exchange your shares. Any gain
resulting from the sale of Fund shares will generally be subject
to federal income tax. When you exchange shares of a Fund for
shares of another series, the transaction generally will be
treated as a sale of the Fund shares for these purposes, and any
gain on those shares will generally be subject to federal income
tax.
. A Note on the Tax-Efficient Equity Fund. The Tax-Efficient
Equity Fund utilizes a number of tax-efficient management
techniques designed to minimize taxable distributions. For
instance, the Fund generally seeks to minimize realized gains and,
when realizing gains, attempts to realize gains that will 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. Shareholders of the Global Innovation,
International and Allianz Select International Funds may be
entitled to claim a credit or deduction with respect to foreign
taxes.
This section relates only to federal income tax consequences of
investing in the Funds; the consequences under other tax laws may
differ. You should consult your tax advisor as to the possible
application of foreign, state and local income tax laws to Fund
dividends and capital distributions. Please see the Statement of
Additional Information for additional information regarding the
tax aspects of investing in the Funds.
Characteristics and Risks of Securities and Investment Techniques
This section provides additional information about some of the
principal investments and related risks of the Funds identified
under "Summary Information" above. It also describes
characteristics and risks of additional securities and investment
techniques that are not necessarily principal investments or
strategies but may be used by the Funds from time to time. Most of
these securities and investment techniques are discretionary,
which means that the portfolio managers can decide whether to use
them or not. This Prospectus does not attempt to disclose all of
the various types of securities and investment techniques that may
be used by the Funds. As with any mutual fund, investors in the
Funds must rely on the professional investment judgment and skill
of PIMCO Advisors, the Sub-Advisers and the individual portfolio
managers. Please see "Investment Objectives and Policies" in the
Statement of Additional Information for more detailed information
about the securities and investment techniques described in this
section and about other strategies and techniques that may be used
by the Funds.
Prospectus 54
<PAGE>
Fixed Fixed income securities are obligations of the issuer to make
Income payments of principal and/or interest on future dates, and include
Securities corporate and government bonds, notes, certificates of deposit,
and commercial paper, convertible securities and mortgage-backed and
Defensive other asset-backed securities.
Strategies
The Capital Appreciation, Mid-Cap and Tax-Efficient Equity Funds
intend to be as fully invested in common stocks as practicable at
all times, although, for cash management purposes, each of these
Funds may maintain a portion of its assets (normally not more than
10%) in U.S. Government securities, high quality fixed income
securities, money market obligations and cash to pay certain Fund
expenses and to meet redemption requests. None of these Funds will
make defensive investments in response to unfavorable market and
other conditions and therefore may be particularly vulnerable to
general declines in stock prices and/or other categories of
securities in which they invest.
Under normal circumstances, the Small-Cap Value Fund intends to
be fully invested in common stocks (aside from cash management
practices), except that the Fund may temporarily hold up to 10% of
its assets in cash and cash equivalents for defensive purposes in
response to unfavorable market and other conditions. The Equity
Income, Global Innovation, Growth, Innovation, International,
Opportunity, Renaissance, Select Growth, Allianz Select
International, 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 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 Growth & Income Fund will invest primarily in
common stocks, but may also invest significant portions of its
assets in preferred stocks, fixed income securities, convertible
securities and real estate investment trusts, or "REITs." The
Growth & Income Fund may temporarily hold up to 100% of its assets
in short-term U.S. Government securities and other money market
instruments for defensive purposes in response to unfavorable
market and other conditions. The International and Allianz Select
International Funds may also hold up to 100% of their assets in
other domestic fixed income, foreign fixed income and equity
securities principally traded in the U.S., including obligations
issued or guaranteed by a foreign government or its agencies,
authorities or instrumentalities, corporate bonds and American
Depository Receipts, for temporary defensive purposes. The
temporary defensive strategies described in this paragraph would
be inconsistent with the investment objective and principal
investment strategies of each of the noted Funds and may adversely
affect the Fund's ability to achieve its investment objective.
Companies Each of the Funds may invest in securities of companies with
With market capitalizations that are small compared to other publicly
Smaller traded companies. The Opportunity and Small-Cap Value Funds invest
Market primarily in smaller companies and are especially sensitive to the
Capitali- risks described below. In addition, the Global Innovation and
ations Innovation Funds generally have substantial exposure to these
risks. The Growth & Income, Mid-Cap, Allianz Select International
and Target Funds also have significant exposure to these risks
because they invest primarily in companies with medium-sized
market capitalizations, which are smaller and generally less well-
known or seasoned 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
55 PIMCO Funds: Multi-Manager Series
<PAGE>
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.
Initial The Funds, particularly the Global Innovation Fund, may purchase
Public securities in initial public offerings (IPOs). These securities
Offerings 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. At any particular
time or from time to time a Fund may not be able to invest in
securities issued in IPOs, or invest to the extent desired,
because, for example, only a small portion (if any) of the
securities being offered in an IPO may be made available to the
Fund. In addition, under certain market conditions fewer companies
may issue securities in IPOs. Similarly, as the number of Funds to
which IPO securities are allocated increases, the number of
securities issued to any one Fund may decrease. The investment
performance of a Fund during periods when it is unable to invest
significantly or at all in IPOs may be lower than during periods
when the Fund is able to do so. In addition, as a Fund increases
in size, the impact of IPOs on the Fund's performance will
generally decrease.
Foreign The International and Allianz Select International Funds normally
(non- invest principally in securities of foreign issuers, securities
U.S.) traded principally in securities markets outside the United States
Securities and/or securities denominated in foreign currencies (together,
"foreign securities"). The Global Innovation Fund will invest in
the securities of issuers located in at least three countries (one
of which may be the United States). The Equity Income, Growth,
Growth & Income, Innovation, Opportunity, Renaissance, Target and
Value Funds may invest up to 15% of their respective assets in
foreign securities. The Select Growth Fund may invest up to 25% of
its assets in foreign securities. Each of these Funds may invest
without limit in ADRs (defined below). The Tax-Efficient Equity
Fund may invest in common stocks of foreign issuers if included in
the S&P 500 Index.
All of the Funds may invest in American Depository Receipts
(ADRs). In addition, the Equity Income, Global Innovation, Growth,
Growth & Income, Innovation, International, Opportunity,
Renaissance, Select Growth, Allianz Select International, 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 or that trade principally in
Securities countries with developing (or "emerging market") economies. The
Global Innovation, International and Allianz Select International
Funds may invest significant portions of their assets in emerging
market securities. Investing in emerging market securities imposes
risks different from, or greater than, risks of investing in
domestic securities or in foreign, developed countries. These
risks include: smaller market capitalization of securities
markets, which may suffer periods of relative illiquidity;
significant price volatility; restrictions on foreign investment;
and possible repatriation of investment income and capital. In
addition, foreign investors may be required to register
Prospectus 56
<PAGE>
the proceeds of sales, and future economic or political crises
could lead to price controls, forced mergers, expropriation or
confiscatory taxation, seizure, nationalization or the creation of
government monopolies. The currencies of emerging market countries
may experience significant declines against the U.S. dollar, and
devaluation may occur subsequent to investments in these
currencies by a Fund. Inflation and rapid fluctuations in
inflation rates have had, and may continue to have, negative
effects on the economies and securities markets of certain
emerging market countries.
Additional risks of emerging market securities may include:
greater social, economic and political uncertainty and
instability; more substantial governmental involvement in the
economy; less governmental supervision and regulation;
unavailability of currency hedging techniques; companies that are
newly organized and small; differences in auditing and financial
reporting standards, which may result in unavailability of
material information about issuers; and less developed legal
systems. In addition, emerging securities markets may have
different clearance and settlement procedures, which may be unable
to keep pace with the volume of securities transactions or
otherwise make it difficult to engage in such transactions.
Settlement problems may cause a Fund to miss attractive investment
opportunities, hold a portion of its assets in cash pending
investment, or be delayed in disposing of a portfolio security.
Such a delay could result in possible liability to a purchaser of
the security.
Special Risks of Investing in Russian and Other Eastern European
Securities. Each of the Global Innovation, International and
Allianz Select International Funds may invest a significant
portion of its assets in securities of issuers located in Russia
and in other Eastern European countries. While investments in
securities of such issuers are subject generally to the same risks
associated with investments in other emerging market countries
described above, the political, legal and operational risks of
investing in Russian and other Eastern European issuers, and of
having assets custodied within these countries, may be
particularly acute. A risk of particular note with respect to
direct investment in Russian securities is the way in which
ownership of shares of companies is normally recorded. When a Fund
invests in a Russian issuer, it will normally receive a "share
extract," but that extract is not legally determinative of
ownership. The official record of ownership of a company's share
is maintained by the company's share registrar. Such share
registrars are completely under the control of the issuer, and
investors are provided with few legal rights against such
registrars.
Foreign A Fund that invests directly in foreign currencies or in
Currencies securities that trade in, and receive revenues in, foreign
currencies will be subject to currency risk. The Global
Innovation, International and Allianz Select International Funds
are particularly sensitive to this risk.
Foreign currency exchange rates may fluctuate significantly over
short periods of time. They generally are determined by supply and
demand and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other
complex factors. Currency exchange rates also can be affected
unpredictably by intervention (or the failure to intervene) by
U.S. or foreign governments or central banks, or by currency
controls or political developments. For example, uncertainty
surrounds the introduction of the euro (a common currency unit for
the European Union) and the effect it may have on the value of
European currencies as well as 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, Growth & Income, Innovation, International,
Opportunity, Renaissance, Select Growth, Allianz Select
International, Target and Value Funds may enter into forward
foreign currency exchange contracts, primarily to reduce the risks
of adverse changes in foreign exchange rates. In addition, the
Global Innovation, International and Allianz Select International
Funds may buy and sell foreign currency futures contracts and
options on foreign currencies and foreign currency futures. A
forward foreign currency exchange contract, which involves an
obligation to purchase or sell a specific currency at a future
date at a price set at the time of the contract, reduces a Fund's
exposure to changes in the value of the currency it will deliver
and increases its exposure to changes in the value of the currency
it will receive for the duration of the contract. The effect on
the value of a Fund is similar to selling securities denominated
in one currency and purchasing securities denominated in another
currency. Contracts to sell foreign currency would limit any
potential gain which might be realized by a Fund if the value of
the hedged currency increases. A Fund may enter into these
contracts to hedge against foreign exchange risk arising from the
Fund's investment or anticipated investment in securities
denominated in foreign currencies. Suitable hedging transactions
may not be available in all circumstances and there can be no
assurance that a Fund will engage in such transactions at any
given time or from time to time. Also, such transactions may not
be successful and may eliminate any chance for a Fund to benefit
from favorable fluctuations in relevant foreign currencies.
57 PIMCO Funds: Multi-Manager Series
<PAGE>
The Global Innovation, International and Allianz Select
International Funds may also enter into these contracts for
purposes of increasing exposure to a foreign currency or to shift
exposure to foreign currency fluctuations from one currency to
another. To the extent that it does so, a Fund will be subject to
the additional risk that the relative value of currencies will be
different than anticipated by the Fund's portfolio manager. The
Global Innovation, International and Allianz Select International
Funds may use one currency (or basket of currencies) to hedge
against adverse changes in the value of another currency (or
basket of currencies) when exchange rates between the two
currencies are positively correlated. Each Fund will segregate
assets determined to be liquid by PIMCO Advisors or the Fund's
Sub-Adviser in accordance with procedures established by the Board
of Trustees to cover its obligations under forward foreign
currency exchange contracts entered into for non-hedging purposes.
Corporate Each Fund that may invest in fixed income securities may invest in
Debt corporate debt securities. The Growth & Income Fund may invest up
Securities to 10% of its assets in these securities. Corporate debt
securities are subject to the risk of the issuer's inability to
meet principal and interest payments on the obligation and may
also be subject to price volatility due to factors such as
interest rate sensitivity, market perception of the
creditworthiness of the issuer and general market liquidity. When
interest rates rise, the value of corporate debt securities can be
expected to decline. Debt securities with longer durations tend to
be more sensitive to interest rate movements than those with
shorter durations.
Convertible Each Fund may invest in convertible securities. The Growth &
Securities Income Fund may place particular emphasis on convertible
securities. Convertible 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, Mid-Cap and Small-Cap
Value Funds) may, but is not required to, use a number of
derivative instruments for risk management purposes or as part of
its investment strategies. Generally, derivatives are financial
contracts whose value depends upon, or is derived from, the value
of an underlying asset, reference rate or index, and may relate to
stocks, bonds, interest rates, currencies or currency exchange
rates, commodities, and related indexes. A portfolio manager may
decide not to employ any of these strategies and there is no
assurance that any derivatives strategy used by a Fund will
succeed. In addition, 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.
Examples of derivative instruments include options contracts,
futures contracts, options on futures contracts and swap
agreements. The Equity Income, Global Innovation, Growth, Growth &
Income, Innovation, International, Opportunity, Renaissance,
Select Growth, Allianz Select International, 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 Global Innovation, Allianz Select
International and Tax-Efficient Equity Funds 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
Prospectus 58
<PAGE>
itself, without the benefit of observing the performance of the
derivative under all possible market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
Liquidity Risk Liquidity risk exists when a particular derivative
instrument is difficult to purchase or sell. If a derivative
transaction is particularly large or if the relevant market is
illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When a Fund uses derivatives
for leverage, investments in that Fund will tend to be more
volatile, resulting in larger gains or losses in response to
market changes. To limit leverage risk, each Fund will segregate
assets determined to be liquid by PIMCO Advisors or a Sub-Adviser
in accordance with procedures established by the Board of Trustees
(or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under derivative
instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that a Fund
will engage in derivatives transactions at any time or from time
to time. A Fund's ability to use derivatives may also be limited
by certain regulatory and tax considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the risk that the market value of the
instrument will change in a way detrimental to a Fund's interest.
If a portfolio manager incorrectly forecasts the values of
securities, currencies or interest rates or other economic factors
in using derivatives for a Fund, the Fund might have been in a
better position if it had not entered into the transaction at all.
While some strategies involving derivative instruments can reduce
the risk of loss, they can also reduce the opportunity for gain or
even result in losses by offsetting favorable price movements in
other Fund investments. A Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to a Fund. Also, the value of
derivatives may not correlate perfectly, or at all, with the value
of the assets, reference rates or indexes they are designed to
closely track. In addition, a Fund's use of derivatives may cause
the Fund to realize higher amounts of short-term capital gains
(taxed at ordinary income tax rates when distributed to
shareholders who are individuals) than if the Fund had not used
such instruments.
Equity- The Funds may invest in equity-linked securities. The Allianz
Linked Select International Fund may invest up to 15% of its assets in
Securities equity-linked securities. The International Fund may invest up to
5% of its assets in equity-linked securities. Equity-linked
securities are privately issued securities whose investment
results are designed to correspond generally to the performance of
a specified stock index or "basket" of stocks, or sometimes a
single stock. To the extent that the Fund invests in equity-linked
securities whose return corresponds to the performance of a
foreign securities index or one or more of foreign stocks,
investing in equity-linked securities will involve risks similar
to the risks of investing in foreign equity securities. See
"Foreign Securities" above. In addition, the Fund bears the risk
that the issuer of an equity-linked security may default on its
obligations under the security. Equity-linked securities may be
considered illiquid and thus subject to the Fund's restrictions on
investments in illiquid securities.
Credit The Funds may invest in securities based on their credit ratings
Ratings assigned by rating agencies such as Moody's Investors Service,
and Inc. ("Moody's") and Standard and Poor's Ratings Services ("S&P").
Unrated Moody's, S&P and other rating agencies are private services that
Securities provide ratings of the credit quality of fixed income securities,
including convertible securities. The Appendix to the Statement of
Additional
59 PIMCO Funds: Multi-Manager Series
<PAGE>
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.
High Securities rated lower than Baa by Moody's or lower than BBB by
Yield S&P are sometimes referred to as "high yield securities" or "junk
Securities bonds." The Funds, particularly the Growth & Income Fund, may
invest in these securities. Investing in these securities involves
special risks in addition to the risks associated with investments
in higher-rated fixed income securities. While offering a greater
potential opportunity for capital appreciation and higher yields,
these securities may be subject to greater levels of interest
rate, credit and liquidity risk, may entail greater potential
price volatility and may be less liquid than higher-rated
securities. These securities may be regarded as predominately
speculative with respect to the issuer's continuing ability to
meet principal and interest payments. They may also be more
susceptible to real or perceived adverse economic and competitive
industry conditions than higher-rated securities.
Loans of For the purpose of achieving income, each Fund may lend its
Portfolio portfolio securities to brokers, dealers, and other financial
Securities institutions provided a number of conditions are satisfied,
including that the loan is fully collateralized. Please see
"Investment Objectives and Policies" in the Statement of
Additional Information for details. When a Fund lends portfolio
securities, its investment performance will continue to reflect
changes in the value of the securities loaned, and the Fund will
also receive a fee or interest on the collateral. Securities
lending involves the risk of loss of rights in the collateral or
delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. A Fund may pay
lending fees to the party arranging the loan.
Short Each Fund may make short sales as part of its overall portfolio
Sales management strategies or to offset a potential decline in the
value of a security. A short sale involves the sale of a security
that is borrowed from a broker or other institution to complete
the sale. A Fund may only enter into short selling transactions if
the security sold short is held in the Fund's portfolio or if the
Fund has the right to acquire the security without the payment of
further consideration. For these purposes, a Fund may also hold or
have the right to acquire securities which, without the payment of
any further consideration, are convertible into or exchangeable
for the securities sold short. Short sales expose a Fund to the
risk that it will be required to acquire, convert or exchange
securities to replace the borrowed securities (also known as
"covering" the short position) at a time when the securities sold
short have appreciated in value, thus resulting in a loss to the
Fund.
When- Each Fund may purchase securities which it is eligible to purchase
Issued, on a when-issued basis, may purchase and sell such securities for
Delayed delayed delivery and may make contracts to purchase such
Delivery securities for a fixed price at a future date beyond normal
and settlement time (forward commitments). When-issued transactions,
Forward delayed delivery purchases and forward commitments involve a risk
Commitment of loss if the value of the securities declines prior to the
Transac- settlement date. This risk is in addition to the risk that the
tions Fund's other assets will decline in value. Therefore, these
transactions may result in a form of leverage and increase a
Fund's overall investment exposure. Typically, no income accrues
on securities a Fund has committed to purchase prior to the time
delivery of the securities is made, although a Fund may earn
income on securities it has segregated to cover these positions.
Repurchase Each Fund may enter into repurchase agreements, in which the Fund
Agreements purchases a security from a bank or broker-dealer that agrees to
repurchase the security at the Fund's cost plus interest within a
specified time. If the party agreeing to repurchase should
default, the Fund will seek to sell the securities which it holds.
This could involve procedural costs or delays in addition to a
loss on the securities if their value should fall below their
repurchase price. Those Funds whose investment objectives do not
include the earning of income will invest in repurchase agreements
only as a cash management technique with respect to that portion
of its portfolio maintained in cash. Repurchase agreements
maturing in more than seven days are considered illiquid
securities.
Prospectus
60
<PAGE>
Reverse Each Fund may enter into reverse repurchase agreements, subject to
Repurchase the Fund's limitations on borrowings. A reverse repurchase
Agreements agreement involves the sale of a security by a Fund and its
And Other agreement to repurchase the instrument at a specified time and
Borrowings price, and may be considered a form of borrowing for some
purposes. A Fund will segregate assets determined to be liquid by
PIMCO Advisors or a Sub-Adviser in accordance with procedures
established by the Board of Trustees to cover its obligations
under reverse repurchase agreements. A Fund also may borrow money
for investment purposes subject to any policies of the Fund
currently described in this Prospectus or in the Statement of
Additional Information. Reverse repurchase agreements and other
forms of borrowings may create leveraging risk for a Fund.
Illiquid Each Fund may invest in securities that are illiquid so long as
Securities not more than 15% of the value of the Fund's net assets (taken at
market value at the time of investment) would be invested in such
securities. Certain illiquid securities may require pricing at
fair value as determined in good faith under the supervision of
the Board of Trustees. A portfolio manager may be subject to
significant delays in disposing of illiquid securities held by a
Fund, and transactions in illiquid securities may entail
registration expenses and other transaction costs that are higher
than those for transactions in liquid securities. The term
"illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of
business at approximately the amount at which a Fund has valued
the securities. Please see "Investment Objectives and Policies" in
the Statement of Additional Information for a listing of various
securities that are generally considered to be illiquid for these
purposes. Restricted securities, i.e., securities subject to legal
or contractual restrictions on resale, may be illiquid. However,
some restricted securities (such as securities issued pursuant to
Rule 144A under the Securities Act of 1933 and certain commercial
paper) may be treated as liquid, although they may be less liquid
than registered securities traded on established secondary
markets.
Investment The International and Allianz Select International Funds may
in Other invest up to 10% of their assets in securities of other investment
Investment companies, such as closed-end management investment companies, or
Companies in pooled accounts or other investment vehicles which invest in
foreign markets. Each of the other Funds may invest up to 5% of
its assets in other investment companies. As a shareholder of an
investment company, a Fund may indirectly bear service and other
fees which are in addition to the fees the Fund pays its service
providers.
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.
Funds, such as the Growth & Income, Select Growth and Allianz
Select International Funds, that have recently changed Sub-
Advisers and/or investment objectives and policies may experience
increased portfolio turnover due to the differences between the
Funds' previous and current investment objectives and policies and
portfolio management strategies.
Changes The investment objective of each of the Global Innovation, Growth,
in Growth & Income, Innovation, International, Opportunity,
Investment Renaissance, Select Growth, Allianz Select International, Target
Objectives and Tax-Efficient Equity Funds described in this Prospectus may be
and changed by the Board of Trustees without shareholder approval. The
Policies investment objective of each other Fund is fundamental and may not
be changed 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.
61 PIMCO Funds: Multi-Manager Series
<PAGE>
New and In addition to the risks described under "Summary of Principal
Smaller- Risks" above and in this section, several of the Funds are newly
Sized formed and therefore have limited or no performance history for
Funds investors to evaluate. Also, it is possible that newer Funds and
smaller-sized Funds may invest in securities offered in initial
public offerings and other types of transactions (such as private
placements) which, because of the Funds' size, may have a
disproportionate impact on the Funds' performance results. The
Funds would not necessarily have achieved the same performance
results if their 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 62
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Class A, Class B and Class C shares
of each Fund for the past 5 years or, if the class is less than 5
years old, since the class of shares was first offered. Certain
information reflects financial results for a single Fund share.
The total returns in the table represent the rate that an investor
would have earned or lost on an investment in a particular class
of shares of a Fund, assuming reinvestment of all dividends and
distributions. This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with each Fund's
financial statements, are included in the Trust's annual report to
shareholders. The annual report is incorporated by reference in
the Statement of Additional Information and is available free of
charge upon request from the Distributor.
The information provided for each of the Growth, Innovation,
International, Opportunity, Renaissance and Target Funds reflects
the operational history of a corresponding series of PIMCO
Advisors Funds which reorganized as a series of the Trust on
January 17, 1997. In connection with the reorganizations, these
Funds changed their fiscal year ends from September 30 to June 30.
The expense ratios provided for these Funds for periods prior to
January 17, 1997 reflect fee arrangements of PIMCO Advisors Funds
previously in effect which differ from the current fee
arrangements of the Trust. The Growth & Income and Allianz Select
International Funds did not offer Class A, B or C shares during
the periods ended June 30, 2000.
<TABLE>
<CAPTION>
Year or Net Realized/ Dividends Dividends in Distributions
Period Net Asset Value Net Unrealized Total Income From Net Excess of Net From Net
Ended Beginning Investment Gain (Loss) on From Investment Investment Investment Realized Capital
of Period Income (Loss) Investments Operations Income Income Gains
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Capital Appreci-
ation Fund
Class A
06/30/00 $26.65 $(0.03)(a) $5.34 (a) $5.31 $(0.01) $(0.01) $(5.00)
06/30/99 26.01 0.06 (a) 2.33 (a) 2.39 (0.10) 0.00 (1.65)
06/30/98 21.16 0.07 (a) 6.55 (a) 6.62 (0.09) 0.00 (1.68)
01/20/97-
06/30/97 19.31 0.09 1.76 1.85 0.00 0.00 0.00
Class B
06/30/00 26.29 (0.22)(a) 5.23 (a) 5.01 0.00 0.00 (5.00)
06/30/99 25.75 (0.13)(a) 2.32 (a) 2.19 0.00 0.00 (1.65)
06/30/98 21.10 (0.11)(a) 6.51 (a) 6.40 (0.07) 0.00 (1.68)
01/20/97-
06/30/97 19.31 0.01 1.78 1.79 0.00 0.00 0.00
Class C
06/30/00 26.31 (0.22)(a) 5.25 (a) 5.03 0.00 0.00 (5.00)
06/30/99 25.78 (0.13)(a) 2.31 (a) 2.18 0.00 0.00 (1.65)
06/30/98 21.10 (0.12)(a) 6.53 (a) 6.41 (0.05) 0.00 (1.68)
01/20/97-
06/30/97 19.31 0.02 1.77 1.79 0.00 0.00 0.00
Equity Income
Fund (i)
Class A
06/30/00 $15.58 $0.33 (a) $(2.42)(a) $(2.09) $(0.36) $0.00 $(0.48)
06/30/99 16.04 0.39 (a) 1.29 (a) 1.68 (0.38) 0.00 (1.76)
06/30/98 15.39 0.39 (a) 2.73 (a) 3.12 (0.38) 0.00 (2.09)
01/20/97-
06/30/97 13.94 0.15 1.48 1.63 (0.18) 0.00 0.00
Class B
06/30/00 15.50 0.24 (a) (2.40)(a) (2.16) (0.27) 0.00 (0.48)
06/30/99 15.99 0.28 (a) 1.27 (a) 1.55 (0.28) 0.00 (1.76)
06/30/98 15.37 0.26 (a) 2.73 (a) 2.99 (0.28) 0.00 (2.09)
01/20/97-
06/30/97 13.94 0.11 1.48 1.59 (0.16) 0.00 0.00
Class C
06/30/00 15.52 0.24 (a) (2.40)(a) (2.16) (0.27) 0.00 (0.48)
06/30/99 16.01 0.27 (a) 1.27 (a) 1.54 (0.27) 0.00 (1.76)
06/30/98 15.37 0.26 (a) 2.74 (a) 3.00 (0.27) 0.00 (2.09)
01/20/97-
06/30/97 13.94 0.11 1.48 1.59 (0.16) 0.00 0.00
Global Innova-
tion
Class A
12/31/99-
06/30/00 $10.00 $(0.03)(a) $8.96 (a) $8.93 $0.00 $0.00 $0.00
Class B
03/31/00-
06/30/00 20.17 (0.07)(a) (1.19)(a) (1.26) $0.00 $0.00 $0.00
Class C
03/31/00-
06/30/00 20.17 (0.07)(a) (1.19)(a) (1.26) $0.00 $0.00 $0.00
Growth Fund (ii)
Class A
06/30/00 $34.12 $(0.29)(a) $10.77 (a) $10.48 $0.00 $0.00 $(5.66)
06/30/99 32.62 (0.14)(a) 5.56 (a) 5.42 0.00 0.00 (3.92)
06/30/98 27.03 (0.08)(a) 9.99 (a) 9.91 0.00 0.00 (4.32)
10/01/96-
06/30/97 26.58 0.69 3.27 3.96 0.00 0.00 (3.51)
09/30/96 25.73 0.06 3.72 3.78 0.00 0.00 (2.93)
Class B
06/30/00 31.15 (0.51)(a) 9.68 (a) 9.17 0.00 0.00 (5.66)
06/30/99 30.34 (0.35)(a) 5.08 (a) 4.73 0.00 0.00 (3.92)
06/30/98 25.59 (0.28)(a) 9.35 (a) 9.07 0.00 0.00 (4.32)
10/01/96-
06/30/97 25.46 0.35 3.29 3.64 0.00 0.00 (3.51)
09/30/96 24.94 (0.07) 3.52 3.45 0.00 0.00 (2.93)
<CAPTION>
Year or Distributions
Period in Excess of
Ended Net Realized
Capital Gains
-------------------------------------------------------------------------------------------------------------------------
<S> <C>
Capital Appreci-
ation Fund
Class A
06/30/00 $0.00
06/30/99 $0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class B
06/30/00 0.00
06/30/99 0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class C
06/30/00 0.00
06/30/99 0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Equity Income
Fund (i)
Class A
06/30/00 $(2.16)
06/30/99 0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class B
06/30/00 (2.16)
06/30/99 0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class C
06/30/00 (2.16)
06/30/99 0.00
06/30/98 0.00
01/20/97-
06/30/97 0.00
Global Innova-
tion
Class A
12/31/99-
06/30/00 $0.00
Class B
03/31/00-
06/30/00 $0.00
Class C
03/31/00-
06/30/00 $0.00
Growth Fund (ii)
Class A
06/30/00 $0.00
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
Class B
06/30/00 0.00
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 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 Fund reflects the results
of operations under the Fund's former Sub-Adviser through May 8, 2000; the
Fund would not necessarily have achieved the results shown above under its
current investment management arrangements.
(ii) The information provided for the Growth Fund reflects results of
operations under the Fund's former Sub-Adviser through March 6, 2000; the
Fund would not necessarily have achieved the performance results shown
above under its current investment management arrangements.
63 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Expenses to Income (Loss) to
eturn ofR Total Value End of Net Assets End Average Net Average Net Portfolio
Capital Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0.00 $(5.02) $26.94 22.73% $91,927 1.11% (0.10)% 119%
0.00 (1.75) 26.65 10.14 91,296 1.10 0.24 120
0.00 (1.77) 26.01 32.39 72,803 1.10 0.27 75
0.00 0.00 21.16 9.58 6,534 1.11* 0.59* 87
0.00 (5.00) 26.30 21.79 66,044 1.86 (0.86) 119
0.00 (1.65) 26.29 9.39 55,094 1.85 (0.52) 120
0.00 (1.75) 25.75 31.39 40,901 1.85 (0.47) 75
0.00 0.00 21.10 9.27 3,022 1.85* (0.26)* 87
0.00 (5.00) 26.34 21.85 82,864 1.86 (0.86) 119
0.00 (1.65) 26.31 9.34 81,097 1.85 (0.52) 120
0.00 (1.73) 25.78 31.40 71,481 1.85 (0.49) 75
0.00 0.00 21.10 9.27 13,093 1.86* (0.23)* 87
$0.00 $(3.00) $10.49 (13.17)% $11,434 1.12% 2.77% 114%
0.00 (2.14) 15.58 12.26 17,342 1.10 2.64 76
0.00 (2.47) 16.04 21.35 12,954 1.11 2.39 45
0.00 (0.18) 15.39 11.77 1,756 1.13* 2.85* 45
0.00 (2.91) 10.43 (13.79) 12,903 1.87 2.01 114
0.00 (2.04) 15.50 11.35 21,732 1.85 1.89 76
0.00 (2.37) 15.99 20.47 15,178 1.85 1.63 45
0.00 (0.16) 15.37 11.45 2,561 1.87* 2.11* 45
0.00 (2.91) 10.45 (13.78) 13,929 1.87 1.99 114
0.00 (2.03) 15.52 11.28 26,016 1.85 1.86 76
0.00 (2.36) 16.01 20.51 23,122 1.85 1.60 45
0.00 (0.16) 15.37 11.42 6,624 1.87* 2.15* 45
$0.00 $0.00 $18.93 89.30% $31,998 1.61%(b)* (0.58)*% 131%
$0.00 $0.00 18.91 (6.25) 25,375 2.60 (c)* (1.70)* 131
$0.00 $0.00 18.91 (6.25) 46,826 2.60 (c)* (1.70)* 131
$0.00 $(5.66) $38.94 32.49% $255,744 1.61% (0.78)% 72%
0.00 (3.92) 34.12 18.65 227,638 1.16 (0.44) 131
0.00 (4.32) 32.62 41.03 180,119 1.16 (0.27) 123
0.00 (3.51) 27.03 15.93 147,276 1.11* 0.13* 94
0.00 (2.93) 26.58 16.11 151,103 1.11 0.24 104
0.00 (5.66) 34.66 31.31 213,627 1.91 (1.53) 72
0.00 (3.92) 31.15 17.72 133,850 1.90 (1.19) 131
0.00 (4.32) 30.34 39.97 80,719 1.91 (1.02) 123
0.00 (3.51) 25.59 15.32 55,626 1.86* (0.62)* 94
0.00 (2.93) 25.46 15.22 37,256 1.86 (0.51) 104
</TABLE>
-------
(b) If the investment manager had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 1.67% for the
period ended June 30, 2000.
(c) If the investment manager had not reimbursed expenses, the ratio of
operating expenses to average net assets would have been 2.70% for the
period ended June 30, 2000.
Prospectus
64
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Realized/ Dividends Dividends in Distributions
Year or Net Asset Value Net Unrealized Total Income From Net Excess of Net From Net
Period Beginning Investment Gain (Loss) on From Investment Investment Investment Realized Capital
Ended of Period Income (Loss) Investments Operations Income Income Gains
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Growth Fund
(Cont.)
Class C
06/30/00 $31.15 $(0.51)(a) $ 9.68 (a) $ 9.17 $0.00 $0.00 $(5.66)
06/30/99 30.33 (0.35)(a) 5.09 (a) 4.74 0.00 0.00 (3.92)
06/30/98 25.58 (0.28)(a) 9.35 (a) 9.07 0.00 0.00 (4.32)
10/01/96-
06/30/97 25.46 0.45 3.18 3.63 0.00 0.00 (3.51)
09/30/96 24.94 (0.12) 3.57 3.45 0.00 0.00 (2.93)
Innovation Fund
(iii)
Class A
06/30/00 $37.46 $(0.58)(a) $41.80 (a) $41.22 $0.00 $0.00 $(6.39)
06/30/99 24.28 (0.28)(a) 14.72 (a) 14.44 0.00 0.00 (1.26)
06/30/98 17.43 (0.19)(a) 8.21 (a) 8.02 0.00 0.00 (0.99)
10/01/96-
06/30/97 17.26 0.07 0.36 0.43 0.00 0.00 (0.26)
9/30/96 14.74 (0.07) 2.94 2.87 0.00 0.00 (0.35)
Class B
06/30/00 36.09 (1.01)(a) 40.37 (a) 39.36 0.00 0.00 (6.39)
06/30/99 23.60 (0.49)(a) 14.24 (a) 13.75 0.00 0.00 (1.26)
06/30/98 17.10 (0.33)(a) 8.00 (a) 7.67 0.00 0.00 (0.99)
10/01/96-
06/30/97 17.04 (0.03) 0.35 0.32 0.00 0.00 (0.26)
9/30/96 14.66 (0.11) 2.84 2.73 0.00 0.00 (0.35)
Class C
06/30/00 36.08 (1.00)(a) 40.35 (a) 39.35 0.00 0.00 (6.39)
06/30/99 23.59 (0.48)(a) 14.23 (a) 13.75 0.00 0.00 (1.26)
06/30/98 17.09 (0.33)(a) 8.00 (a) 7.67 0.00 0.00 (0.99)
10/01/96-
06/30/97 17.04 (0.02) 0.33 0.31 0.00 0.00 (0.26)
9/30/96 14.65 (0.15) 2.89 2.74 0.00 0.00 (0.35)
International
Fund (iv)
Class A
06/30/00 $12.45 $ 0.03 (a) $ 1.46 (a) $ 1.49 $0.00 $0.00 $(1.74)
06/30/99 14.33 0.01 (a) (0.74)(a) (0.73) 0.00 0.00 (1.15)
06/30/98 14.26 0.06 (a) 1.13 (a) 1.19 0.00 0.00 (0.82)
10/01/96-
06/30/97 13.03 0.29 1.33 1.62 0.00 0.00 (0.39)
9/30/96 12.19 0.07 0.77 0.84 0.00 0.00 0.00
Class B
06/30/00 11.51 (0.06)(a) 1.25 (a) 1.19 0.00 0.00 (1.74)
06/30/99 13.46 (0.08)(a) (0.72)(a) (0.80) 0.00 0.00 (1.15)
06/30/98 13.56 (0.05)(a) 1.07 (a) 1.02 0.00 0.00 (0.82)
10/01/96-
06/30/97 12.48 0.16 1.31 1.47 0.00 0.00 (0.39)
9/30/96 11.75 0.00 (a) 0.73 (a) 0.73 0.00 0.00 0.00
Class C
06/30/00 11.50 (0.09)(a) 1.27 (a) 1.18 0.00 0.00 (1.74)
06/30/99 13.45 (0.09)(a) (0.71)(a) (0.80) 0.00 0.00 (1.15)
06/30/98 13.55 (0.06)(a) 1.08 (a) 1.02 0.00 0.00 (0.82)
10/01/96-
06/30/97 12.47 0.18 1.29 1.47 0.00 0.00 (0.39)
9/30/96 11.75 (0.05) 0.77 0.72 0.00 0.00 0.00
Mid-Cap Fund (v)
Class A
06/30/00 $22.82 $(0.01)(a) $ 7.82 (a) $ 7.81 $(0.02) $(0.02) $(0.02)
06/30/99 24.00 0.03 (a) (0.13)(a) (0.10) (0.01) 0.00 (1.07)
06/30/98 20.24 0.02 (a) 5.11 (a) 5.13 (0.04) 0.00 (1.33)
01/13/97-
06/30/97 18.14 (0.04) 2.14 2.10 0.00 0.00 0.00
Class B
06/30/00 22.43 (0.20)(a) 7.66 (a) 7.46 0.00 0.00 (0.02)
06/30/99 23.77 (0.13)(a) (0.14)(a) (0.27) 0.00 0.00 (1.07)
06/30/98 20.17 (0.16)(a) 5.09 (a) 4.93 0.00 0.00 (1.33)
01/13/97-
06/30/97 18.14 (0.11) 2.14 2.03 0.00 0.00 0.00
<CAPTION>
Year or Distributions
Period in Excess of
Ended Net Realized
Capital Gains
-------------------------------------------------------------------------------------------------------------------------
<S> <C>
Growth Fund
(Cont.)
Class C
06/30/00 $ 0.00
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
Innovation Fund
(iii)
Class A
06/30/00 $ 0.00
06/30/99 0.00
06/30/98 (0.18)
10/01/96-
06/30/97 0.00
9/30/96 0.00
Class B
06/30/00 0.00
06/30/99 0.00
06/30/98 (0.18)
10/01/96-
06/30/97 0.00
9/30/96 0.00
Class C
06/30/00 0.00
06/30/99 0.00
06/30/98 (0.18)
10/01/96-
06/30/97 0.00
9/30/96 0.00
International
Fund (iv)
Class A
06/30/00 $ 0.00
06/30/99 0.00
06/30/98 (0.30)
10/01/96-
06/30/97 0.00
9/30/96 0.00
Class B
06/30/00 0.00
06/30/99 0.00
06/30/98 (0.30)
10/01/96-
06/30/97 0.00
9/30/96 0.00
Class C
06/30/00 0.00
06/30/99 0.00
06/30/98 (0.30)
10/01/96-
06/30/97 0.00
9/30/96 0.00
Mid-Cap Fund (v)
Class A
06/30/00 $ 0.00
06/30/99 0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
Class B
06/30/00 0.00
06/30/99 0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
</TABLE>
-------
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(b) Ratio of expenses to average net assets excluding interest expense is
1.46%.
(c) Ratio of expenses to average net assets excluding interest expense is
2.21%.
(iii) The information provided for the Innovation Fund reflects results of
operations under the Fund's former Sub-Adviser through March 6, 1999;
the Fund would not necessarily have achieved the performance results
shown above under its current investment management arrangements.
(iv) The information provided for the International Fund reflects results of
operations under the Fund's former Sub-Advisers through November 15,
1994; the Fund would not necessarily have achieved the performance
results shown above under its current investment management
arrangements.
(v) Formerly the Mid-Cap Growth Fund.
PIMCO Funds: Multi-Manager Series
65
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Expenses to Income (Loss) to
Return of Total Value End of Net Assets End Average Net Average Net Portfolio
Capital Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $(5.66) $34.66 31.31 % $2,416,067 1.91% (1.53)% 72%
0.00 (3.92) 31.15 17.76 2,064,450 1.90 (1.18) 131
0.00 (4.32) 30.33 39.99 1,853,002 1.91 (1.02) 123
0.00 (3.51) 25.58 15.27 1,514,432 1.86* (0.61)* 94
0.00 (2.93) 25.46 15.22 1,450,216 1.86 (0.51) 104
$ 0.00 $(6.39) $72.29 115.04 % $1,408,455 1.30% (0.91)% 186%
0.00 (1.26) 37.46 61.36 313,946 1.30 (0.90) 119
0.00 (1.17) 24.28 48.10 85,800 1.31 (0.94) 100
0.00 (0.26) 17.43 2.41 56,215 1.28* (0.68)* 80
0.00 (0.35) 17.26 19.86 50,067 1.31 (0.61) 123
0.00 (6.39) 69.06 114.17 1,680,792 2.05 (1.66) 186
0.00 (1.26) 36.09 60.17 351,876 2.05 (1.64) 119
0.00 (1.17) 23.60 46.95 81,130 2.06 (1.69) 100
0.00 (0.26) 17.10 1.79 51,472 2.03* (1.43)* 80
0.00 (0.35) 17.04 18.99 33,778 2.06 (1.36) 123
0.00 (6.39) 69.04 114.17 2,275,811 2.05 (1.66) 186
0.00 (1.26) 36.08 60.20 580,251 2.05 (1.65) 119
0.00 (1.17) 23.59 46.97 219,258 2.06 (1.69) 100
0.00 (0.26) 17.09 1.73 162,889 2.03* (1.43)* 80
0.00 (0.35) 17.04 19.08 137,752 2.06 (1.36) 123
$ 0.00 $(1.74) $12.20 11.85 % $ 12,452 1.52%(b) 0.26% 58%
0.00 (1.15) 12.45 (4.31) 18,865 1.55 (b) 0.05 55
0.00 (1.12) 14.33 9.95 12,510 1.48 0.41 60
0.00 (0.39) 14.26 12.82 18,287 1.51* 0.58* 59
0.00 0.00 13.03 6.89 20,056 1.41 0.49 110
0.00 (1.74) 10.96 10.00 10,176 2.28 (c) (0.55) 58
0.00 (1.15) 11.51 (5.15) 9,478 2.29 (c) (0.67) 55
0.00 (1.12) 13.46 9.17 8,956 2.22 (0.37) 60
0.00 (0.39) 13.56 12.17 8,676 2.26* 0.18* 59
0.00 0.00 12.48 6.21 5,893 2.16 (0.26) 110
0.00 (1.74) 10.94 9.91 92,220 2.28 (c) (0.77) 58
0.00 (1.15) 11.50 (5.15) 101.320 2.30 (c) (0.75) 55
0.00 (1.12) 13.45 9.18 132,986 2.22 (0.43) 60
0.00 (0.39) 13.55 12.18 168,446 2.25* (0.25)* 59
0.00 0.00 12.47 6.13 203,544 2.16 (0.26) 110
$ 0.00 $(0.06) $30.57 34.28 % $ 156,949 1.11% (0.05)% 164%
0.00 (1.08) 22.82 (0.13) 124,680 1.10 0.15 85
0.00 (1.37) 24.00 25.71 57,164 1.11 0.07 66
0.00 0.00 20.24 11.58 12,184 1.11* 0.17* 82
0.00 (0.02) $29.87 33.27 88,648 1.86 (0.80) 164
0.00 (1.07) 22.43 (0.86) 84,698 1.85 (0.62) 85
0.00 (1.33) 23.77 24.76 84,535 1.86 (0.68) 66
0.00 0.00 20.17 11.19 28,259 1.86* (0.58)* 82
</TABLE>
Prospectus 66
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Net Realized/ Dividends Dividends in Distributions
Year or Net Asset Value Net Unrealized Total Income From Net Excess of Net From Net
Period Beginning Investment Gain (Loss) on From Investment Investment Investment Realized Capital
Ended of Period Income (Loss) Investments Operations Income Income Gains
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Mid-Cap Fund
(Cont.)
Class C
06/30/00 $22.44 $(0.20)(a) $ 7.66 (a) $ 7.46 $0.00 $0.00 $(0.02)
06/30/99 23.77 (0.13)(a) (0.13)(a) (0.26) 0.00 0.00 (1.07)
06/30/98 20.18 (0.16)(a) 5.08 (a) 4.92 0.00 0.00 (1.33)
01/13/97-
06/30/97 18.14 (0.10) 2.14 2.04 0.00 0.00 0.00
Opportunity Fund
(vi)
Class A
06/30/00 $26.96 $(0.25)(a) $12.75 (a) $12.50 $0.00 $0.00 $(7.88)
06/30/99 31.33 (0.21)(a) 0.46 (a) 0.25 0.00 0.00 (4.62)
06/30/98 29.35 (0.27)(a) 4.19 (a) 3.92 0.00 0.00 (1.94)
10/01/96-
06/30/97 37.36 0.00 (3.10) (3.10) 0.00 0.00 (4.91)
09/30/96 39.08 (0.11) 6.12 6.01 0.00 0.00 (7.73)
Class B
06/30/00 24.20 (0.43)(a) 11.32 (a) 10.89 0.00 0.00 (7.88)
03/31/99-
06/30/99 21.40 (0.09) 2.89 2.80 0.00 0.00 0.00
Class C
06/30/00 24.19 (0.42)(a) 11.33 (a) 10.91 0.00 0.00 (7.88)
06/30/99 28.86 (0.37)(a) 0.32 (a) (0.05) 0.00 0.00 (4.62)
06/30/98 27.38 (0.46)(a) 3.88 (a) 3.42 0.00 0.00 (1.94)
10/01/96-
06/30/97 35.38 (0.04) (3.05) (3.09) 0.00 0.00 (4.91)
09/30/96 37.64 (0.35) 5.82 5.47 0.00 0.00 (7.73)
Renaissance Fund
(vii)
Class A
06/30/00 $18.21 $0.06 (a) $ 0.13 (a) $ 0.19 $0.00 $0.00 $(2.59)
06/30/99 19.10 (0.01)(a) 1.45 (a) 1.44 0.00 0.00 (2.33)
06/30/98 17.73 0.07 (a) 4.91 (a) 4.98 (0.08) 0.00 (3.53)
10/01/96-
06/30/97 16.08 0.12 (a) 3.90 (a) 4.02 (0.12) 0.00 (2.25)
09/30/96 14.14 0.23 2.79 3.02 (0.23) (0.07) (0.78)
Class B
06/30/00 17.99 (0.07)(a) 0.13 (a) 0.06 0.00 0.00 (2.59)
06/30/99 19.06 (0.13)(a) 1.39 (a) 1.26 0.00 0.00 (2.33)
06/30/98 17.77 (0.07)(a) 4.91 (a) 4.84 (0.02) 0.00 (3.53)
10/01/96-
06/30/97 16.12 0.03 (a) 3.92 (a) 3.95 (0.05) 0.00 (2.25)
09/30/96 14.13 0.09 2.83 2.92 (0.11) (0.04) (0.78)
Class C
06/30/00 17.91 (0.07)(a) 0.13 (a) 0.06 0.00 0.00 (2.59)
06/30/99 18.96 (0.13)(a) 1.41 (a) 1.28 0.00 0.00 (2.33)
06/30/98 17.69 (0.07)(a) 4.88 (a) 4.81 (0.01) 0.00 (3.53)
10/01/96-
06/30/97 16.05 0.03 (a) 3.90 (a) 3.93 (0.04) 0.00 (2.25)
09/30/96 14.09 0.12 2.78 2.90 (0.13) (0.03) (0.78)
Select Growth
Fund (viii)
Class A
03/31/00-
06/30/00 $23.25 $(0.00)(a) $0.74 (a) $0.74 $0.00 $0.00 $0.00
Class B
03/31/00-
06/30/00 23.25 (0.06)(a) 0.77 (a) 0.71 0.00 0.00 0.00
Class C
03/31/00-
06/30/00 23.25 (0.05)(a) 0.76 (a) 0.71 0.00 0.00 0.00
<CAPTION>
Distributions
Year or in Excess of
Period Net Realized
Ended Capital Gains
-------------------------------
<S> <C>
Mid-Cap Fund
(Cont.)
Class C
06/30/00 $0.00
06/30/99 0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
Opportunity Fund
(vi)
Class A
06/30/00 $0.00
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
Class B
06/30/00 0.00
03/31/99-
06/30/99 0.00
Class C
06/30/00 0.00
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
Renaissance Fund
(vii)
Class A
06/30/00 $(0.86)
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
Class B
06/30/00 (0.86)
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
Class C
06/30/00 (0.86)
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
Select Growth
Fund (viii)
Class A
03/31/00-
06/30/00 $0.00
Class B
03/31/00-
06/30/00 0.00
Class C
03/31/00-
06/30/00 0.00
</TABLE>
-------
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(vi) The information provided for the Opportunity Fund reflects results of
operations under the Fund's former Sub-Adviser through March 6, 1999;
the Fund would not necessarily have achieved the performance results
shown above under its current investment management arrangements.
(vii) The information provided for the Renaissance Fund reflects results of
operations under the Fund's former Sub-Adviser through May 7, 1999; the
Fund would not necessarily have achieved the performance results shown
above under its current investment management arrangements.
(viii) Formerly the PIMCO Core Equity Fund. The Fund changed its investment
objective and policies on April 1, 2000; the performance results shown
above would not necessarily have been achieved had the Fund's current
objective and policies been in effect during the periods shown. In
addition, the performance results shown above reflect the Fund's
advisory fee level in effect prior to April 1, 2000; these results
would have been lower had the Fund's current advisory fee level then
been in effect.
67 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Expenses to Income to
Return of Total Value End of Net Assets End Average Net Average Net Portfolio
Capital Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0.00 $(0.02) $29.88 33.25 % $104,082 1.86% (0.80)% 164%
0.00 (1.07) 22.44 (0.82) 112,507 1.85 (0.63) 85
0.00 (1.33) 23.77 24.70 140,438 1.86 (0.68) 66
0.00 0.00 20.18 11.25 53,686 1.86* (0.58)* 82
$0.00 $(7.88) $31.58 50.77 % $142,064 1.31% (0.81)% 254%
0.00 (4.62) 26.96 3.98 121,507 1.31 (0.86) 175
0.00 (1.94) 31.33 13.87 200,935 1.31 (0.88) 86
0.00 (4.91) 29.35 (8.87) 213,484 1.25* (0.12)* 69
0.00 (7.73) 37.36 18.35 134,859 1.13 (0.32) 91
0.00 (7.88) 27.21 49.78 28,145 2.06 (1.57) 254
0.00 0.00 24.20 13.08 251 2.03* (1.65)* 175
0.00 (7.88) 27.22 49.88 401,118 2.06 (1.57) 254
0.00 (4.62) 24.19 3.20 308,877 2.06 (1.62) 175
0.00 (1.94) 28.86 13.01 500,011 2.06 (1.63) 86
0.00 (4.91) 27.38 (9.40) 629,446 1.97* (0.95)* 69
0.00 (7.73) 35.38 17.47 800,250 1.88 (1.07) 91
$0.00 $(3.45) $14.95 3.36 % $ 68,433 1.25% 0.36 % 133%
0.00 (2.33) 18.21 9.94 90,445 1.26 (0.04) 221
0.00 (3.61) 19.10 30.98 85,562 1.26 0.35 192
0.00 (2.37) 17.73 27.53 33,606 1.23* 0.95* 131
0.00 (1.08) 16.08 22.37 20,631 1.25 1.60 203
0.00 (3.45) 14.60 2.59 89,621 2.00 (0.45) 133
0.00 (2.33) 17.99 8.94 126,576 2.00 (0.78) 221
0.00 (3.55) 19.06 29.99 100,688 2.01 (0.39) 192
0.00 (2.30) 17.77 26.88 37,253 1.97* 0.20* 131
0.00 (0.93) 16.12 21.54 15,693 2.00 0.85 203
0.00 (3.45) 14.52 2.60 311,519 2.00 (0.45) 133%
0.00 (2.33) 17.91 9.12 442,049 2.00 (0.79) 221
0.00 (3.54) 18.96 29.98 469,797 2.01 (0.37) 192
0.00 (2.29) 17.69 26.86 313,226 1.97* 0.21* 131
0.00 (0.94) 16.05 21.52 230,058 2.00 0.85 203
$0.00 $0.00 $23.99 3.18 % $7,841 1.25%* (0.01)%* 170%
0.00 0.00 23.96 3.05 2,173 2.00* (0.96)* 170
0.00 0.00 23.96 3.05 4,196 2.00* (0.90)* 170
</TABLE>
Prospectus 68
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Year or Net Realized/ Dividends Dividends in Distributions
Period Net Asset Value Net Unrealized Total Income From Net Excess of Net From Net
Ended Beginning Investment Gain (Loss) on From Investment Investment Investment Realized Capital
of Period Income (Loss) Investments Operations Income Income Gains
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Small-Cap Value
Fund
Class A
06/30/00 $15.93 $ 0.32 (a) $ (1.81)(a) $ (1.49) $(0.32) $0.00 $ 0.00
06/30/99 17.58 0.26 (a) (1.29)(a) (1.03) (0.17) 0.00 0.00
06/30/98 15.75 0.23 (a) 2.49 (a) 2.72 (0.13) 0.00 (0.76)
01/20/97-
06/30/97 14.02 0.10 1.63 1.73 0.00 0.00 0.00
Class B
06/30/00 15.79 0.21 (a) (1.79)(a) (1.58) (0.17) 0.00 0.00
06/30/99 17.43 0.14 (a) (1.27)(a) (1.13) (0.06) 0.00 0.00
06/30/98 15.71 0.09 (a) 2.48 (a) 2.57 (0.09) 0.00 (0.76)
01/20/97-
06/30/97 14.02 0.08 1.61 1.69 0.00 0.00 0.00
Class C
06/30/00 15.82 0.21 (a) (1.79)(a) (1.58) (0.18) 0.00 0.00
06/30/99 17.44 0.14 (a) (1.27)(a) (1.13) (0.04) 0.00 0.00
06/30/98 15.71 0.09 (a) 2.49 (a) 2.58 (0.09) 0.00 (0.76)
01/20/97-
06/30/97 14.02 0.08 1.61 1.69 0.00 0.00 0.00
Target Fund (ix)
Class A
06/30/00 $17.72 $(0.23)(a) $15.45 (a) $15.22 $ 0.00 $0.00 $(1.80)
03/31/99-
06/30/99 16.35 (0.09)(a) 2.44 (a) 2.35 0.00 0.00 (0.98)
06/30/98 16.82 (0.08)(a) 4.06 (a) 3.98 0.00 0.00 (4.45)
10/01/96-
06/30/97 17.11 (0.04)(a) 1.82 (a) 1.78 0.00 0.00 (2.07)
09/30/96 16.40 (0.05) 2.54 2.49 0.00 0.00 (1.78)
Class B
06/30/00 16.44 (0.39)(a) 14.35 (a) 13.96 0.00 0.00 (1.80)
06/30/99 15.34 (0.19)(a) 2.27 (a) 2.08 0.00 0.00 (0.98)
06/30/98 16.14 (0.19)(a) 3.84 (a) 3.65 0.00 0.00 (4.45)
10/01/96-
06/30/97 16.58 (0.12)(a) 1.75 (a) 1.63 0.00 0.00 (2.07)
09/30/96 16.06 (0.09) 2.39 2.30 0.00 0.00 (1.78)
Class C
06/30/00 16.43 (0.38)(a) 14.34 (a) 13.96 0.00 0.00 (1.80)
06/30/99 15.34 (0.19)(a) 2.26 (a) 2.07 0.00 0.00 (0.98)
06/30/98 16.13 (0.19)(a) 3.85 (a) 3.66 0.00 0.00 (4.45)
10/01/96-
06/30/97 16.58 (0.12)(a) 1.74 (a) 1.62 0.00 0.00 (2.07)
09/30/96 16.05 (0.16) 2.47 2.31 0.00 0.00 (1.78)
Tax-Efficient
Equity Fund
Class A
06/30/00 $11.59 $ 0.00 (a) $ 0.65 (a) $ 0.65 $ 0.00 $0.00 $ 0.00
07/10/98-
06/30/99 10.00 0.03 (a) 1.56 (a) 1.59 0.00 0.00 0.00
Class B
06/30/00 11.51 (0.09)(a) 0.64 (a) 0.55 0.00 0.00 0.00
07/10/98-
06/30/99 10.00 (0.05)(a) 1.56 (a) 1.51 0.00 0.00 0.00
Class C
06/30/00 11.51 (0.09)(a) 0.64 (a) 0.55 0.00 0.00 0.00
07/10/98-
06/30/99 10.00 (0.05)(a) 1.56 (a) 1.51 0.00 0.00 0.00
Value Fund (x)
Class A
06/30/00 $15.29 $ 0.22 (a) $ (1.33)(a) $ (1.11) $(0.23) $0.00 $(0.57)
06/30/99 15.64 0.24 (a) 1.35 (a) 1.59 (0.22) 0.00 (1.72)
06/30/98 14.80 0.19 (a) 2.46 (a) 2.65 (0.18) 0.00 (1.63)
01/13/97-
06/30/97 13.17 0.47 1.26 1.73 (0.10) 0.00 0.00
Class B
06/30/00 15.26 0.13 (a) (1.33)(a) (1.20) (0.13) 0.00 (0.57)
06/30/99 15.63 0.12 (a) 1.35 (a) 1.47 (0.12) 0.00 (1.72)
06/30/98 14.80 0.07 (a) 2.46 (a) 2.53 (0.07) 0.00 (1.63)
01/13/97-
06/30/97 13.16 0.44 1.26 1.70 (0.06) 0.00 0.00
Class C
06/30/00 15.26 0.13 (a) (1.33)(a) (1.20) (0.13) 0.00 (0.57)
06/30/99 15.63 0.12 (a) 1.35 (a) 1.47 (0.12) 0.00 (1.72)
06/30/98 14.80 0.07 (a) 2.46 (a) 2.53 (0.07) 0.00 (1.63)
01/13/97-
06/30/97 13.15 0.43 1.28 1.71 (0.06) 0.00 0.00
<CAPTION>
Year or Distributions
Period in Excess of
Ended Net Realized
Capital Gains
-------------------------------
<S> <C>
Small-Cap Value
Fund
Class A
06/30/00 $ 0.00
06/30/99 (0.45)
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class B
06/30/00 0.00
06/30/99 (0.45)
06/30/98 0.00
01/20/97-
06/30/97 0.00
Class C
06/30/00 0.00
06/30/99 (0.45)
06/30/98 0.00
01/20/97-
06/30/97 0.00
Target Fund (ix)
Class A
06/30/00 $ 0.00
03/31/99-
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
Class B
06/30/00 0.00
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
Class C
06/30/00 0.00
06/30/99 0.00
06/30/98 0.00
10/01/96-
06/30/97 0.00
09/30/96 0.00
Tax-Efficient
Equity Fund
Class A
06/30/00 $ 0.00
07/10/98-
06/30/99 0.00
Class B
06/30/00 0.00
07/10/98-
06/30/99 0.00
Class C
06/30/00 0.00
07/10/98-
06/30/99 0.00
Value Fund (x)
Class A
06/30/00 $(2.00)
06/30/99 0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
Class B
06/30/00 (2.00)
06/30/99 0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
Class C
06/30/00 (2.00)
06/30/99 0.00
06/30/98 0.00
01/13/97-
06/30/97 0.00
</TABLE>
-------
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(ix) The information provided for the Target Fund reflects results of
operations under the Fund's former Sub-Adviser through March 6, 1999; the Fund
would not necessarily have achieved the performance results shown above under
its current investment management arrangements.
(x)The information provided for the Value Fund reflects the results of
operations under the Fund's former Sub-Adviser through May 8, 2000; the Fund
would not necessarily have achieved the results shown above under its current
investment management arrangements.
69 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Expenses to Income (Loss) to
Return of Total Value End of Net Assets End Average Net Average Net Portfolio
Capital Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0.00 $(0.32) $14.12 (9.26)% $114,347 1.26% 2.28 % 55%
0.00 (0.62) 15.93 (5.50) 107,569 1.25 1.74 60
0.00 (0.89) 17.58 17.33 75,070 1.25 1.27 41
0.00 0.00 15.75 12.34 6,563 1.30* 1.94* 48
0.00 (0.17) 14.04 (9.94) 55,435 2.01 1.46 55
0.00 (0.51) 15.79 (6.22) 96,994 2.00 0.95 60
0.00 (0.85) 17.43 16.40 110,833 2.00 0.53 41
0.00 0.00 15.71 12.05 11,077 2.04* 1.23* 48
0.00 (0.18) 14.06 (9.95) 69,808 2.01 1.46 55
0.00 (0.49) 15.82 (6.21) 112,926 2.00 0.95 60
0.00 (0.85) 17.44 16.42 130,466 2.00 0.52 41
0.00 0.00 15.71 12.05 20,637 2.05* 1.13* 48
$0.00 $(1.80) $31.34 90.36 % $305,304 1.21% (0.91)% 99%
0.00 (0.98) 17.72 15.69 170,277 1.21 (0.57) 229
0.00 (4.45) 16.35 27.49 157,277 1.22 (0.49) 226
0.00 (2.07) 16.82 11.19 150,689 1.20* (0.31)* 145
0.00 (1.78) 17.11 16.50 156,027 1.18 (0.34) 141
0.00 (1.80) 28.60 89.74 223,939 1.96 (1.66) 99
0.00 (0.98) 16.44 14.93 78,659 1.95 (1.31) 229
0.00 (4.45) 15.34 26.45 76,194 1.96 (1.24) 226
0.00 (2.07) 16.14 10.58 67,531 1.94* (1.05)* 145
0.00 (1.78) 16.58 15.58 49,851 1.93 (1.09) 141
0.00 (1.80) 28.59 89.79 1,676,384 1.96 (1.67) 99
0.00 (0.98) 16.43 14.86 910,494 1.95 (1.31) 229
0.00 (4.45) 15.34 26.53 952,728 1.96 (1.24) 226
0.00 (2.07) 16.13 10.52 969,317 1.94* (1.06)* 145
0.00 (1.78) 16.58 15.66 974,948 1.93 (1.09) 141
$0.00 $ 0.00 $12.24 5.61% $ 9,226 1.11% 0.02% 32%
0.00 0.00 11.59 15.90 6,579 1.11* 0.25* 13
0.00 0.00 12.06 4.78 10,794 1.86 (0.74) 32
0.00 0.00 11.51 15.10 6,370 1.85* (0.50)* 13
0.00 0.00 12.06 4.78 15,651 1.86 (0.73) 32
0.00 0.00 11.51 15.10 10,742 1.84* (0.52)* 13
$0.00 $(2.80) $11.38 (7.11)% $ 19,087 1.11% 1.76 % 196%
0.00 (1.94) 15.29 11.93 22,267 1.11 1.68 101
0.00 (1.81) 15.64 18.86 21,742 1.11 1.19 77
0.00 (0.10) 14.80 13.19 15,648 1.11* 1.71* 71
0.00 (2.70) 11.36 (7.77) 26,908 1.86 1.02 196
0.00 (1.84) 15.26 11.05 36,314 1.85 0.85 101
0.00 (1.70) 15.63 17.98 35,716 1.86 0.45 77
0.00 (0.06) 14.80 12.93 25,433 1.86* 0.96* 71
0.00 (2.70) 11.36 (7.81) 53,756 1.86 1.02 196
0.00 (1.84) 15.26 11.04 80,594 1.85 0.83 101
0.00 (1.70) 15.63 17.98 88,235 1.86 0.45 77
0.00 (0.06) 14.80 13.02 64,110 1.86* 0.97* 71
</TABLE>
Prospectus 70
<PAGE>
PIMCO Funds: Multi-Manager Series
The Trust's Statement of Additional Information ("SAI") and annual
and semi-annual reports to shareholders include additional
information about the Funds. The SAI and the financial statements
included in the Funds' most recent annual report to shareholders
are incorporated by reference into this Prospectus, which means
they are part of this Prospectus for legal purposes. The Funds'
annual report discusses the market conditions and investment
strategies that significantly affected each Fund's performance
during its last fiscal year.
The SAI includes the PIMCO Funds Shareholders' Guide for Class A,
B and C Shares, a separate booklet which contains more detailed
information about Fund purchase, redemption and exchange options
and procedures and other information about the Funds. You can get
a free copy of the Guide together with or separately from the rest
of the SAI.
You may get free copies of any of these materials, request other
information about a Fund, or make shareholder inquiries by calling
1-800-426-0107, or by writing to:
PIMCO Funds Distributors LLC
2187 Atlantic Street
Stamford, Connecticut 06902
You may review and copy information about the Trust, including its
SAI, at the Securities and Exchange Commission's public reference
room in Washington, D.C. You may call the Commission at 1-202-942-
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 Commssion'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>
(This page left blank intentionally)
<PAGE>
(This page left blank intentionally)
<PAGE>
--------------------------------------------------------------------
PIMCO INVESTMENT ADVISER AND ADMINISTRATOR
Funds: PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Multi- 92660
Manager
Series
--------------------------------------------------------------------
SUB-ADVISERS
PIMCO Equity Advisors division of PIMCO Advisors L.P.,
PIMCO/Allianz Investment Advisors LLC, Cadence Capital Management,
NFJ Investment Group, Parametric Portfolio Associates, Blairlogie
Capital Management
--------------------------------------------------------------------
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., P.O. Box 9688, Providence, RI 02940
--------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
--------------------------------------------------------------------
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
--------------------------------------------------------------------
For further information about the PIMCO Funds, call 1-800-426-0107
or vist our Web site at www.pimcofunds.com.
Not part of the Prospectus
<PAGE>
[GRAPH]
You'll find all the content you've come to rely on--at pimcofunds.com--and more.
Presenting the new PIMCO Funds Web site at www.pimcofunds.com
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 Innovation Center
The all-new PIMCO Funds Innovation Center is an invaluable resource for tech
investors and those contemplating an investment in this complex, fast-moving
sector. Dedicated to the research and analysis of technology, the Center
provides a number of key resources, including:
. Innovation Newsletter--An online version of our popular technology investing
newsletter, featuring the latest market analysis and outlook from Dennis
McKechnie, PIMCO's renowned tech manager.
. Timely Market Commentary--PIMCO's perspective on unfolding market events.
. Theme Analysis--Manager assessments of the trends or "themes" that PIMCO
believes are driving the tech sector and the industry groups that make up the
market.
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.
PZ001.11/00 Not part of the Prospectus
--------------------------------------------------------------------------------
[LOGO OF PIMCO FUNDS]
----------------
PRESORTED
STANDARD U.S.
PIMCO Funds POSTAGE
Distributors LLC PAID
SMITHTOWN, NY
2187 Atlantic Street PERMIT NO. 700
Stamford, CT 06902-6896 ----------------
<PAGE>
November 1, 2000
PIMCO Funds Prospectus stock
Share Classes GROWTH STOCK FUNDS ENHANCED INDEX STOCK FUNDS
D
Growth Fund Tax-Efficient Equity Fund
Select Growth Fund
Target Fund INTERNATIONAL STOCK FUNDS
Allianz Select
International Fund
BLEND STOCK FUNDS
Growth & Income Fund
Capital Appreciation Fund SECTOR-RELATED STOCK FUNDS
Mid-Cap Fund Innovation Fund
Global Innovation Fund
VALUE STOCK FUNDS
Equity Income Fund
Renaissance Fund
Value Fund
This cover is not part of the Prospectus.
<PAGE>
PIMCO Funds Prospectus
PIMCO This Prospectus describes 13 mutual funds offered by PIMCO Funds:
Funds: Multi-Manager Series. The Funds provide access to the professional
Multi- investment advisory services offered by PIMCO Advisors L.P. and
Manager its investment management affiliates. As of September 30, 2000,
Series PIMCO Advisors and its affiliates managed approximately
$272 billion.
November
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
Growth & Income Fund........................................... 13
Innovation Fund................................................ 15
Mid-Cap Fund................................................... 17
Renaissance Fund............................................... 19
Select Growth Fund............................................. 21
Allianz Select International Fund.............................. 23
Target Fund.................................................... 25
Tax-Efficient Equity Fund...................................... 27
Value Fund..................................................... 29
Summary of Principal Risks....................................... 31
Management of the Funds.......................................... 34
How Fund Shares Are Priced....................................... 39
How to Buy and Sell Shares....................................... 39
Fund Distributions............................................... 42
Tax Consequences................................................. 42
Characteristics and Risks of Securities and Investment
Techniques...................................................... 43
Financial Highlights............................................. 51
</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
-----------------------------------------------------------------------------------------------------------------
Growth & Income Long-term growth of Securities of companies with market 40-60
capital; current income capitalizations of at least $1 billion
is a secondary objective
-----------------------------------------------------------------------------------------------------------------
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 is 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 $5 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
---------------------------------------------------------------------------------------------------------------------------
International Allianz Select Capital appreciation Common stocks of companies located outside of 30-60
Stock Funds International the United States with market capitalizations of
more than $1 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
-----------------------------------------------------------------------------------------------------------------
At least $1 billion
-----------------------------------------------------------------------------------------------------------------
More than $500 million
(excluding the largest
200 companies)
---------------------------------------------------------------------------------------------------------------------------
Value Stock More than $2 billion
Funds
-----------------------------------------------------------------------------------------------------------------
All capitalizations
-----------------------------------------------------------------------------------------------------------------
More than $5 billion
---------------------------------------------------------------------------------------------------------------------------
Enhanced Index More than $5 billion
Stock Funds
---------------------------------------------------------------------------------------------------------------------------
International More than $1 billion
Stock Funds
---------------------------------------------------------------------------------------------------------------------------
Sector-Related More than $200 million
Stock Funds
-----------------------------------------------------------------------------------------------------------------
More than $200 million
</TABLE>
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
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. The
fact that a Fund had good performance in the past (for example,
during the year ended 1999) is no assurance that the value of the
Fund's investments will not decline in the future or appreciate
at a slower rate. An investment in a Fund is not a deposit of a
bank and is not guaranteed or insured by the Federal Deposit
Insurance Corporation or any other government agency.
Prospectus 4
<PAGE>
PIMCO Capital Appreciation Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C> <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:
<TABLE>
<S> <C> <C>
. Market Risk . Growth Securities Risk . Credit Risk
. Issuer Risk . Focused Investment 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 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
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
17.46%
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>
<CAPTION>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
<S> <C> <C> <C>
--------------------------------------------------------------------
Class D 22.24% 26.99% 19.60%
--------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.75%
--------------------------------------------------------------------
Lipper Multi-Cap Core Funds Average(/2/) 20.63% 23.01% 17.15%
--------------------------------------------------------------------
</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 Multi-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges without concentrating in any one market
capitalization range over an extended period of time. 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% 0.41% 1.11%
--------------------------------------------------------------------
(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 and 0.01% in other expenses
attributable to the class during the most recent fiscal year.
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 $113 $353 $612 $1,352
--------------------------------------------------------------------
</TABLE>
Prospectus 6
<PAGE>
PIMCO Equity Income Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Income More than $2
and Seeks current producing billion
Strategies income as a common
primary stocks with
objective; potential
long-term for capital
growth of appreciation
capital is a
secondary
objective
Fund Approximate Number Dividend
Category of Holdings 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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs). In response to unfavorable market and
other conditions, the Fund may make temporary investments of some
or all of its assets in high-quality fixed income securities. This
would be inconsistent with the Fund's investment objective and
principal strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Foreign .Credit Risk
.Issuer Risk Investment Risk .Management
.Value Securities .Currency Risk Risk
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
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
6.88%
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>
<CAPTION>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
-------------------------------------------------------------------
<S> <C> <C> <C>
Class D -2.22% 17.34% 13.83%
-------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.75%
-------------------------------------------------------------------
Lipper Equity Income Funds Average(/2/) 3.62% 17.60% 14.24%
-------------------------------------------------------------------
</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 Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively high current income and
growth of income through investing 65% or more of their
portfolios in dividend-paying 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% 0.42% 1.12%
--------------------------------------------------------------------
</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 0.65% 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 and 0.02% in other expenses
attributable to the class during the most recent fiscal year.
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.
<TABLE>
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $114 $356 $617 $1,363
--------------------------------------------------------------------
</TABLE>
Prospectus 8
<PAGE>
PIMCO Global Innovation Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Principal Investment Objective Fund Focus Approximate Capitalization Range
Investments Seeks capital Common stocks of More than $200 million
and appreciation; no U.S. and non-U.S.
Strategies consideration is technology-
given to income related companies
Dividend Frequency
At least annually
Fund Category Approximate Number
Sector-Related of Holdings
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 may invest a
substantial portion of its assets in the securities of smaller
capitalization companies and securities issued in initial public
offerings (IPOs). 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 invests primarily in
securities traded principally in the securities markets of
developed countries, the Fund has no other prescribed limits on
geographic asset distribution and may invest in any foreign
securities market in the world, including in developing, or
"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:
.Market Risk .Smaller Company Risk .Currency Risk
.Issuer Risk .Liquidity Risk .Focused Investment Risk
.Technology Related Risk .Derivatives Risk .Leveraging Risk
.Growth Securities Risk .Foreign Investment Risk .Credit Risk
.IPO Risk .Emerging Markets Risk .Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The Fund commenced operations in 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>
Distribution Total Annual Net Fund
Advisory and/or Service Other Fund Operating Expense Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses Reduction(/3/) Expenses(/3/)
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class D 1.00% 0.25% 0.69% 1.94% (0.09%) 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 reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees, and 0.09% in organizational
expenses ("Organizational Expenses") attributable to the
class during the most recent fiscal year.
(3) Net Expenses reflect the effect of a contractual agreement by
PIMCO Advisors to waive, reduce or reimburse its
Administrative Fee for each class to the extent Annual Fund
Operating Expenses exceeded, due to the payment of
organizational and certain other expenses, 1.85% for Class D
shares during the Fund's most recent (initial) fiscal year.
Under the Expense Limitation Agreement, PIMCO Advisors may
recoup these waivers and reimbursements (which do not
continue after the Fund's initial fiscal year) in future
periods, not exceeding three years, provided total expenses,
including such recoupment, do not exceed the annual expense
limit.
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.
<TABLE>
Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $188 $581 $998 $2,159
-----------------------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
PIMCO Growth Fund
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------
<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
incidental
consideration
Dividend Frequency
Approximate Number At least annually
of Holdings
Fund Category 35-40
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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future.
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment Risk . Focused
. Issuer Risk . Currency Risk Investment Risk
. Growth Securities . Technology Related Risk . Credit Risk
Risk . Management Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's 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
More Recent Return
Information
--------------------
1/1/00 -
9/30/0 4.43%0
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]
Total Returns
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
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>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
------------------------------------------------------------------
<S> <C> <C> <C> <C>
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 Large-Cap Growth Funds
Average(/2/) 40.54% 29.41% 18.88% 17.74%
------------------------------------------------------------------
</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 Large-Cap Growth Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. 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% 0.41% 1.16%
--------------------------------------------------------------------
</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 0.65% 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 and 0.01% in other expenses
attributable to the class during the most recent fiscal year.
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.
<TABLE>
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $118 $368 $638 $1,409
--------------------------------------------------------------------
</TABLE>
Prospectus 12
<PAGE>
PIMCO Growth & Income Fund
--------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Medium and large Capitalization Range
and growth of capitalization At least $1 billion
Strategies capital; current common stocks
income is a
secondary
objective
Fund Category Approximate Number Dividend Frequency
Blend Stocks of Holdings At least annually
40-60
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in securities of companies
with market capitalizations of at least $1 billion at the time of
investment. The Fund may invest up to 75% of its assets in
securities selected for their growth potential. The Fund will
normally invest at least 25% of its assets in securities selected
for their income potential, including dividend-paying common
stocks, preferred stocks, corporate bonds, convertible securities
and real estate investment trusts (REITs).
When selecting securities for the Fund's "growth" segment, 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's portfolio managers may choose to
sell a stock in the "growth" segment when they believe that its
earnings will be disappointing or that market sentiment on the
company will turn negative. The portfolio managers will also
consider selling a stock if the company does not meet the
managers' estimates on revenues and/or earnings, or if an
alternative investment is deemed to be more attractive.
When selecting securities for the Fund's "income" segment, the
portfolio managers seek to identify companies with strong
operating fundamentals that offer potential for capital
appreciation and that also have a dividend yield in excess of the
yield on the S&P 500 Index. The portfolio managers may replace an
"income" security when another security with a similar risk-to-
reward profile offers either better potential for capital
appreciation or a higher yield than the Fund's current holding. To
achieve its income objective, the Fund may also invest to a
limited degree in preferred stocks, convertible securities and
REITs. The Fund may invest up to 10% of its assets in corporate
bonds, which will typically consist of investment grade securities
of varying maturities but may also include high yield securities
("junk bonds") rated at least B by Standard & Poor's Rating
Services or Moody's Investors Service, Inc. or, if unrated,
determined by the Adviser to be of comparable quality.
The Fund may invest up to 15% of its assets in foreign
securities, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future. 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 . Liquidity Risk . Interest Rate Risk
. Issuer Risk . Foreign . High Yield Risk
. Growth Securities Investment Risk . Credit Risk
Risk . Currency Risk . Management Risk
. Value Securities . Focused Investment Risk
Risk . Technology Related Risk
. Smaller Company
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 following shows summary performance information for the Fund
Information in a bar chart and an Average Annual Total Returns table. The
information provides some indication of the risks of investing in
the Fund by showing changes in its performance from year to year
and by showing how the Fund's average annual returns compare with
the returns of a broad-based securities market index and an index
of similar funds. The bar chart and the information to its right
show performance of the Fund's Institutional Class shares, 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 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 for periods prior to August 1, 2000
reflects the Fund's advisory fee rate in
13 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Growth & Income Fund (continued)
effect prior to that date (0.63% per annum), which is higher than
the current rate (0.60% per annum). Prior to July 1, 1999, the
Fund had a different sub-adviser and would not necessarily have
achieved the performance results shown under its current
investment management arrangements. In addition, the Fund changed
its investment objective and policies on August 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.
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00-
9/30/00 23.58%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99 40.12%)
--------------------
Lowest (7/1/98-
9/30/98 -11.53%)
[GRAPH]
Total Returns
1995 1996 1997 1998 1999
31.72% 17.31% 16.22% 39.40% 109.71%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/28/94)(/3/)
---------------------------------------------------------------------
<S> <C> <C> <C>
Institutional Class 51.81% 28.77% 28.72%
---------------------------------------------------------------------
Class D 51.22% 28.27% 28.21%
---------------------------------------------------------------------
S&P Mid-Cap 400 Index(/1/) 14.73% 23.05% 23.05%
---------------------------------------------------------------------
Lipper Large-Cap Core Funds Average(/2/) 22.77% 25.49% 25.49%
---------------------------------------------------------------------
</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 Large-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. It
does not take into account sales charges. The Lipper Large-Cap
Core Funds Average replaced the Lipper Mid-Cap Fund Average (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) because PIMCO Advisors believes the Large-
Cap Core Funds Average is more representative of the Fund's
investment strategies. For periods ended December 31, 1999,
the 1 Year, 5 Years and Fund Inception average annual total
returns of the Lipper Mid-Cap Fund Average were 39.38%, 23.07%
and 23.07%, respectively.
(3) The Fund began operations on 12/28/94. Index comparisons begin
on 12/31/94.
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold 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(/1/) (12b-1) Fees(/2/) Expenses(/3/) Expenses
--------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.60 0.25% 0.65% 1.50%
--------------------------------------------------------------
</TABLE>
(1) On August 1, 2000, the Fund's advisory fee rate decreased by
0.03% to 0.60% per annum.
(2) 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 0.75% 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.
(3) 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 and 0.15% in other expenses
estimated to be attributable to the class during the current
fiscal year.
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.
<TABLE>
<CAPTION>
Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $153 $474 $818 $1,791
-----------------------------------------------------------------------------------
</TABLE>
Prospectus 14
<PAGE>
PIMCO Innovation Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Common stocks of More than $200
and Seeks capital technology-related million
Strategies appreciation; companies
no
consideration
is given to
income
Dividend
Fund Approximate Number Frequency
Category of Holdings At least annually
Sector-Related 40
Stocks
</TABLE>
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 a
substantial portion of its assets in the securities of smaller
capitalization companies. The Fund may invest up to 15% of its
assets in foreign securities, except that it may invest without
limit in 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 . Currency
. Issuer Risk Company Risk Risk
. Focused . Liquidity . Credit Risk
Investment Risk Risk . Management
. Growth . Foreign Risk
Securities Risk Investment Risk
. Technology
Related 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
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.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Innovation Fund (continued)
Calendar Year Total Returns -- Class D
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
21.28%
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>
<CAPTION>
Fund Inception
1 Year 5 Years (12/22/94)(/3/)
-----------------------------------------------------------------------------
<S> <C> <C> <C>
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/) 135.19% 41.03% 41.03%
-----------------------------------------------------------------------------
</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 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%
--------------------------------------------------------------------
</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 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.
<TABLE>
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $132 $412 $713 $1,568
--------------------------------------------------------------------
</TABLE>
Prospectus 16
<PAGE>
PIMCO Mid-Cap Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Medium More than $500
and Seeks growth of capitalization million (excluding
Strategies capital common stocks the largest 200
companies)
Fund Approximate Number
Category of Holdings
Blend Stocks 60-100 Dividend Frequency
At least annually
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of 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:
.Market Risk .Growth .Focused
.Issuer Risk Securities Risk Investment Risk
.Value Securities .Smaller Company .Credit Risk
Risk Risk .Management
Risk
.Liquidity Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. 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.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Mid-Cap Fund (continued)
Calendar Year Total Returns -- Class D
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
27.79%
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>
<CAPTION>
Fund Inception
1 Year 5 Years (8/26/91)(/3/)
------------------------------------------------------------------
<S> <C> <C> <C>
Class D 12.52% 22.19% 17.16%
------------------------------------------------------------------
Russell Mid-Cap Index(/1/) 18.23% 21.85% 17.31%
------------------------------------------------------------------
Lipper Mid-Cap Core Funds Average(/2/) 29.16% 21.12% 16.55%
------------------------------------------------------------------
</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 Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of less than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. 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% 0.41% 1.11%
--------------------------------------------------------------------
</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 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 and 0.01% in other expenses
attributable to the class during the most recent fiscal year.
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.
<TABLE>
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $113 $353 $612 $1,352
--------------------------------------------------------------------
</TABLE>
Prospectus 18
<PAGE>
PIMCO Renaissance Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Undervalued All capitalizations
and Seeks long-term stocks with
Strategies growth of improving
capital and business
income fundamentals
Fund Category Approximate Number Dividend Frequency
Value Stocks of Holdings At least
50-80 annually
</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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Foreign Investment Risk .Credit Risk
.Issuer Risk .Currency Risk .Management Risk
.Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. 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.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Renaissance Fund (continued)
Calendar Year Total Returns -- Class D
More Recent Return
Information
--------------------
1/1/00 -
9/30/00 18.52%
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>
<CAPTION>
Fund Inception
1 Year 5 Years 10 Years (4/18/88)(/3/)
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 9.90% 21.86% 14.57% 14.01%
------------------------------------------------------------------
Russell Mid-Cap Value
Index(/1/) - 0.10% 18.00% 13.81% 14.53%
------------------------------------------------------------------
Lipper Multi-Cap Value Funds
Average(/2/) 6.69% 18.32% 13.11% 13.67%
------------------------------------------------------------------
</TABLE>
(1) The Russell Mid-Cap Value Index is an unmanaged index that
measures the performance of medium capitalization 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 Mid-Cap Value Index replaced the
Russell 1000 Value Index (an unmanaged index that measures the
performance of companies in the Russell 1000 Index considered
to have less than average growth orientation) and 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 Mid-Cap 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 Russell
1000 Value Index were 7.34%, 23.08%, 15.60% and 15.38%,
respectively, and 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 Multi-Cap Value Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges without concentrating in any one market
capitalization range over an extended period of time. 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%
--------------------------------------------------------------------
</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 0.65% 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.
<TABLE>
<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 Select Growth Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate
Investments Objective Larger capitalization Capitalization Range
and Seeks long-term common stocks At least
Strategies growth of $10 billion
capital; income
is an incidental
consideration
Fund Category Approximate Number Dividend Frequency
Growth Stocks of Holdings At least annually
15-25
</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 also invest to a limited degree in other kinds of
equity securities, including preferred stocks and convertible
securities. The Fund may invest up to 25% of its assets in foreign
securities, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future. 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 . Focused Investment Risk . Currency Risk
. Issuer Risk . Growth Securities Risk . Credit Risk
. Technology Related . Foreign Investment Risk . Management Risk
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the 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 for periods prior to
April 1, 2000 reflects the Fund's advisory fee rate in effect
prior to that date (0.57% per annum); these results would have
been lower had the Fund's current advisory fee rate (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.
21 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Select Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
--------------------
1/1/00 -
9/30/00 16.44%
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>
<CAPTION>
Fund Inception
1 Year 5 Years (12/28/94)(/3/)
-----------------------------------------------------------------------
<S> <C> <C> <C>
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 Large-Cap Growth Funds Average(/2/) 40.54% 29.41% 29.41%
-----------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Large-Cap Growth Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. 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>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees(/1/) (12b-1) Fees(/2/) Expenses(/3/) Expenses
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.60 0.25% 0.40% 1.25%
------------------------------------------------------------------
</TABLE>
(1) On April 1, 2000, the Fund's advisory fee rate increased by
0.03%, to 0.60% per annum.
(2) 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.
(3) 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.
<TABLE>
<CAPTION>
Year 1 Year 3 Year 5 Year 10
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $127 $397 $686 $1,511
------------------------------------------------------------------
</TABLE>
Prospectus 22
<PAGE>
PIMCO Allianz Select International Fund
--------------------------------------------------------------------------------
Principal Investment Fund Approximate
Investments Objective Focus Capitalization
and Seeks capital Common stocks of Range
Strategies appreciation non-U.S. issuers More than $1
billion
Fund Approximate Number
Category of Holdings Dividend
International 30-60 Frequency
Stocks At least
annually
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in an international portfolio
of common stocks and other equity securities of companies located
outside of the United States. Although the Fund normally invests
in issuers from at least five different countries, it may at times
invest in fewer than five countries, or even a single country. The
Fund typically invests in approximately 30 to 60 stocks. Although
the Fund invests primarily in developed market countries, it may
also invest in developing, or "emerging," markets. The Fund has no
other limits on geographic asset distribution and may invest in
any foreign securities market in the world. The Fund may also
invest in securities of foreign issuers traded on U.S. securities
markets, but will normally not invest in U.S. issuers. The Fund
invests most of its assets in foreign securities which trade in
currencies other than the U.S. dollar and may invest directly in
foreign currencies.
The portfolio manager selects securities for the Fund using a
research-driven "bottom-up" approach that seeks to utilize the
Sub-Adviser's global research capabilities to identify companies
with above-average long-term growth prospects and attractive
valuations and that possess a sustainable competitive advantage,
such as superior or innovative products, personnel and
distribution systems. The portfolio manager seeks to select those
stocks with the best long-term performance expectations, using a
broad range of company fundamentals, such as long-term growth
prospects, price-to-earnings ratios and other valuation measures,
dividend and profit growth, balance sheet strength and return on
assets. The portfolio managers sell stocks in order to adjust or
rebalance the Fund's portfolio and to replace companies with
weakening fundamentals.
The Fund may invest a portion of its assets in the securities of
small and medium capitalization companies. The Fund may utilize
foreign currency exchange contracts and derivative instruments
(such as stock index futures contracts), primarily for portfolio
management and hedging purposes. The Fund may to a limited degree
invest in equity securities other than common stocks (such as
equity-linked securities, preferred stocks and convertible
securities) and may invest up to 10% of its assets in other
investment companies. In response to unfavorable market and other
conditions, the Funds may make temporary investments of some or
all of its assets in foreign and domestic fixed income securities
and in equity securities of U.S. issuers. This would be
inconsistent with the Fund's investment objective and principal
strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
<TABLE>
<S> <C> <C>
. Foreign . Growth Securities Risk . Focused Investment Risk
Investment
Risk
. Emerging . Value Securities Risk . Leveraging Risk
Market Risk
. Currency . Smaller Company Risk . Credit Risk
Risk
. Market Risk . Liquidity Risk . Management Risk
. Issuer Risk . Derivatives Risk
</TABLE>
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
--------------------------------------------------------------------------------
Performance The 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 shows 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 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.
23 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Allianz Select International Fund (continued)
The performance information for periods prior to May 8, 2000
reflects the Fund's advisory fee rate in effect prior to that date
(0.85% per annum), which is higher than the current rate (0.75%
per annum). Prior to November 1, 2000, the Fund had different sub-
advisers 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 November 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.
Calendar Year Total Returns -- Institutional Class
More Recent Return
Information
[GRAPH] --------------------
1/1/00-9/30/00
ANNUAL RETURN -14.71%
'98 39.40% Highest and Lowest
'99 109.71% Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99) 47.11%
--------------------
Lowest (7/1/98-
9/30/98) -17.78%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year (12/31/97)(/3/)
---------------------------------------------------------------------
<S> <C> <C>
Institutional Class 109.71% 70.98%
---------------------------------------------------------------------
Class D 108.72% 70.32%
---------------------------------------------------------------------
MSCI EAFE Index(/1/) 27.30% 23.77%
---------------------------------------------------------------------
Lipper International Fund Average(/2/) 40.76% 25.87%
---------------------------------------------------------------------
</TABLE>
(1) The Morgan Stanley Capital International EAFE (Europe,
Australia, Far East) ("MSCI EAFE") Index is a widely
recognized, unmanaged index of issuers in countries of Europe,
Australia and the Far East. It is not possible to invest
directly in the index.
(2) The Lipper International Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest their assets in securities whose
primary trading markets are outside of the United States. It
does not take into account sales charges.
(3) The Fund began operations on 12/31/97. Index comparisons begin
on 12/31/97.
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold 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(/1/) (12b-1) Fees(/2/) Expenses(/3/) Expenses
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.75% 0.25% 0.70% 1.70%
------------------------------------------------------------------
(1) On May 8, 2000, the Fund's advisory fee rate decreased by
0.10%, to 0.75% per annum.
(2) 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 0.95% 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.
(3) 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 $173 $536 $923 $2,009
------------------------------------------------------------------
</TABLE>
Prospectus 24
<PAGE>
PIMCO Target Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C> <C> <C>
Principal Investment Fund Focus Approximate
Investments Objective Medium Capitalization
and Seeks capital capitalization Range
Strategies appreciation; no common stocks Between $1
consideration is billion and $10
given to income billion
Fund Category Approximate Dividend
Growth Stocks Number of Frequency
Holdings At least annually
40-60
</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 to a limited degree 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, except that it may invest without limit in American
Depository Receipts (ADRs). The Fund has in the past invested a
significant portion of its assets in technology or technology-
related companies, although there is no assurance that it will
continue to do so in the future.
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 . Liquidity Risk . Focused
. Issuer Risk . Foreign Investment Investment Risk
. Growth Securities Risk . Credit Risk
Risk . Currency Risk . Management
. Smaller Company Risk . Technology Related Risk
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 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.
25 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Target Fund (continued)
Calendar Year Total Returns -- Class A
More Recent Return
Information
--------------------
1/1/00 -
9/30/00 40.50%
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
1993 24.52%
1994 3.09%
1995 30.31%
1996 15.68%
1997 15.44%
1998 23.27%
1999 66.25%
Calendar Year End (through 12/31/99)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<CAPTION>
Fund Inception
1 Year 5 Years (12/17/92)(/3/)
--------------------------------------------------------------------
<S> <C> <C> <C>
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 Multi-Cap Growth Funds
Average(/2/) 57.98% 28.51% 20.93%
--------------------------------------------------------------------
</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 Multi-Cap Growth Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges without concentrating in any one market
capitalization range over an extended period of time. 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%
--------------------------------------------------------------------
</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 0.65% 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.
<TABLE>
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $122 $381 $660 $1,455
--------------------------------------------------------------------
</TABLE>
Prospectus 26
<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
growth of 500 Index
capital
Dividend Frequency
Fund Approximate Number At least annually
Category of Holdings
Enhanced Index More than
200
</TABLE>
The Fund attempts to provide a total return which exceeds the
return of the S&P 500 Index by investing in a broadly diversified
portfolio of at least 200 common stocks. The Fund also attempts to
achieve higher 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:
<TABLE>
<S> <C>
. Market Risk . Growth Securities Risk . Credit Risk
. Issuer Risk . Leveraging Risk . Management Risk
. Value 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. Past performance is no guarantee of future
results.
27 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Tax-Efficient Equity Fund (continued)
Calendar Year Total Returns -- Class D
More Recent Return
Information
--------------------
1/1/00 - 9/30/00
-2.67%
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>
<CAPTION>
Fund Inception
1 Year (7/10/98)(/3/)
---------------------------------------------------------------------
<S> <C> <C>
Class D 17.19% 15.30%
---------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 20.42%
---------------------------------------------------------------------
Lipper Large-Cap Core Funds Average(/2/) 22.77% 20.65%
---------------------------------------------------------------------
</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 Large-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of greater than 300% of the dollar-weighted
median market capitalization of the S&P Mid-Cap 400 Index. 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% 0.41% 1.11%
--------------------------------------------------------------------
</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 0.65% 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 and 0.01% in other expenses
attributable to that class during the most recent fiscal year.
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.
<TABLE>
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $113 $353 $612 $1,352
--------------------------------------------------------------------
</TABLE>
Prospectus 28
<PAGE>
PIMCO Value Fund
--------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Objective Fund Focus Approximate Capitalization Range
Investments Seeks long-term Undervalued larger More than $5 billion
and growth of capitalization
Strategies capital and stocks with improving
income business
fundamentals
Fund Category Approximate Number Dividend Frequency
Value Stocks of Holdings At least
40 annually
</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 $5 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 to a limited degree 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, except that it may invest without limit in 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 Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment . Credit Risk
. Issuer Risk Risk . Management Risk
. Value Securities . Currency 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. 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.
29 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Value Fund (continued)
Calendar Year Total Returns -- Class D
More Recent Return
Information
--------------------
1/1/00 -
9/30/00 12.80%
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>
<CAPTION>
Fund Inception
1 Year 5 Years (12/30/91)(/3/)
--------------------------------------------------------------------
<S> <C> <C> <C>
Class D 3.88% 18.93% 14.67%
--------------------------------------------------------------------
Russell 1000 Value Index(/1/) 7.34% 23.08% 17.85%
--------------------------------------------------------------------
Lipper Multi-Cap Value Funds
Average(/2/) 6.69% 18.32% 14.24%
--------------------------------------------------------------------
</TABLE>
(1) The Russell 1000 Value Index is an unmanaged index that
measures the performance of companies in the Russell 1000
Index considered to have less than average growth orientation.
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 the
Fund's comparative index because PIMCO Advisors believes that
the Russell 1000 Value Index is more representative of the
Fund's investment strategies. For periods ended December 31,
1999, the 1 Year, 5 Year and Fund Inception average annual
total returns of the S&P 500 Index were 21.04%, 28.56% and
19.70%, respectively.
(2) The Lipper Multi-Cap Value Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges, without concentrating in any one market
capitalization range over an extended period of time. 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% 0.41% 1.11%
--------------------------------------------------------------------
</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 0.65% 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 and 0.01% in other expenses
attributable to the class during the most recent fiscal year.
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.
<TABLE>
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $113 $353 $612 $1,352
--------------------------------------------------------------------
</TABLE>
Prospectus 30
<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, Growth &
Income, Mid-Cap, Renaissance, Allianz Select International, Tax-
Efficient Equity and Value Funds may 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, Growth & Income, Innovation, Mid-Cap, Select Growth,
Allianz Select International, Target and Tax-Efficient Equity
Funds may 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 Growth & Income, Mid-Cap,
Allianz Select International 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.
IPO Risk
The Funds, particularly the Global Innovation Fund, may purchase
securities in initial public offerings (IPOs). These securities
are subject to many of the same risks as 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. At any particular
time or from time to time a Fund
31 PIMCO Funds: Multi-Manager Series
<PAGE>
may not be able to invest in securities issued in IPOs, or invest
to the extent desired, because, for example, only a small portion
(if any) of the securities being offered in an IPO may be made
available to the Fund. In addition, under certain market
conditions a relatively small number of companies may issue
securities in IPOs. Similarly, as the number of Funds to which IPO
securities are allocated increases, the number of securities
issued to any one Fund may decrease. The investment performance of
a Fund during periods when it is unable to invest significantly or
at all in IPOs may be lower than during periods when the Fund is
able to do so. In addition, as a Fund increases in size, the
impact of IPOs on the Fund's performance will generally decrease.
Liquidity All of the Funds are subject to liquidity risk. Liquidity risk
Risk exists when particular investments are difficult to purchase or
sell, possibly preventing a Fund from selling such illiquid
securities at an advantageous time or price. Funds with principal
investment strategies that involve securities of companies with
smaller market capitalizations, foreign securities, derivatives or
securities with substantial market and/or credit risk tend to have
the greatest exposure to liquidity risk.
Derivatives All Funds except the Capital Appreciation and Mid-Cap Funds may
Risk use derivatives, which are financial contracts whose value depends
on, or is derived from, the value of an underlying asset,
reference rate or index. The various derivative instruments that
the Funds may use are referenced under "Characteristics and Risks
of Securities and Investment Techniques--Derivatives" in this
Prospectus and described in more detail under "Investment
Objectives and Policies" in the Statement of Additional
Information. The Funds may sometimes use derivatives as part of a
strategy designed to reduce exposure to other risks, such as
interest rate or currency risk. The Funds may also use derivatives
for leverage, which increases opportunities for gain but also
involves greater risk of loss due to leveraging risk. A Fund's use
of derivative instruments involves risks different from, or
possibly greater than, the risks associated with investing
directly in securities and other traditional investments.
Derivatives are subject to a number of risks described elsewhere
in this section, such as liquidity risk, market risk, credit risk
and management risk. They also involve the risk of mispricing or
improper valuation and the risk that changes in the value of the
derivative may not correlate perfectly with the underlying asset,
rate or index. In addition, a Fund's use of derivatives may
increase or accelerate the amount of taxes payable by
shareholders. A Fund investing in a derivative instrument could
lose more than the principal amount invested. Also, suitable
derivative transactions may not be available in all circumstances
and there can be no assurance that a Fund will engage in these
transactions to reduce exposure to other risks when that would be
beneficial.
Sector In addition to other risks, Funds that invest a substantial
Specific portion of their assets in related industries (or "sectors") may
Risks have greater risk because companies in these sectors may share
common characteristics and may react similarly to market
developments.
Technology Related Risk. Because the Global Innovation and
Innovation Funds concentrate their investments in companies which
utilize innovative technologies, they are subject to risks
particularly affecting those companies, such as the risks of short
product cycles and rapid obsolescence of products and services,
competition from new and existing companies, significant losses
and/or limited earnings, security price volatility and limited
operating histories. Other Funds may also be subject to these
risks to the extent they invest their assets in technology or
technology-related companies.
Foreign A Fund that invests in foreign securities, and particularly the
(non- Global Innovation and Allianz Select International Funds, may
U.S.) experience more rapid and extreme changes in value than Funds that
Investment invest exclusively in securities of U.S. issuers or securities
Risk that trade exclusively in U.S. markets. The securities markets of
many foreign countries are relatively small, with a limited number
of companies representing a small number of industries.
Additionally, issuers of foreign securities are usually not
subject to the same degree of regulation as U.S. issuers.
Reporting, accounting and auditing standards of foreign countries
differ, in some cases significantly, from U.S. standards. Also,
nationalization, expropriation or confiscatory taxation, currency
blockage, political changes or diplomatic developments could
adversely affect a Fund's investments in a foreign country. In the
event of nationalization, expropriation or other confiscation, a
Fund could lose its entire investment in foreign securities. To
the extent that a Fund, such as the Global Innovation or Allianz
Select International Fund, invest a significant portion of their
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.
Prospectus 32
<PAGE>
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
and Allianz Select International Funds may invest a significant
portion of their assets in emerging markets securities. In
addition, the risks associated with investing in a narrowly
defined geographic area (discussed above under "Foreign (non-U.S.)
Investment Risk") are generally more pronounced with respect to
investments in emerging market countries.
Currency Funds that invest directly in foreign currencies and in securities
Risk that trade in, or receive revenues in, foreign currencies are
subject to the risk that those currencies will decline in value
relative to the U.S. Dollar, or, in the case of hedging positions,
that the U.S. Dollar will decline in value relative to the
currency being hedged. The Global Innovation and Allianz Select
International Funds are particularly sensitive to Currency Risk.
Currency rates in foreign countries may fluctuate significantly
over short periods of time for a number of reasons, including
changes in interest rates, intervention (or the failure to
intervene) by U.S. or foreign governments, central banks or
supranational entities such as the International Monetary Fund, or
by the imposition of currency controls or other political
developments in the U.S. or abroad.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies or regions increases risk. Funds, such as
Risk the Select 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 and Allianz Select International Funds may
be subject to increased risk to the extent that they focus their
investments in securities denominated in a particular foreign
currency or in a narrowly defined geographic area outside the
U.S., because companies in these areas may share common
characteristics and are often subject to similar business risks
and regulatory burdens, and their securities may react similarly
to economic, market, political or other developments. 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
to the extent they invest a substantial portion of their assets in
companies in related industries such as "technology" or "financial
and business services," which may share common characteristics,
are often subject to similar business risks and regulatory
burdens, and whose securities may react similarly to economic,
market, political or other developments.
Leveraging Leverage, including borrowing, will cause the value of a Fund's
Risk 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 Funds, and in particular the Global Innovation and
Tax-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. 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. The Growth & Income Fund is
particularly sensitive to this risk because it may invest in
interest rate sensitive securities such as corporate bonds.
As interest rates rise, the value of fixed income securities in a
Fund's portfolio are likely to decrease. Securities with longer
"durations" (defined below) tend to be more sensitive to changes
in interest rates, usually making them more volatile than
securities with shorter durations. Duration is a measure of the
expected life of a fixed income security that is used to determine
the sensitivity of a security's price to changes in interest
rates. Generally, a Fund with a longer average portfolio duration
will be more sensitive to changes in interest rates than a Fund
with a shorter average portfolio duration.
33 PIMCO Funds: Multi-Manager Series
<PAGE>
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.
High Funds that invest in high yield securities and unrated securities
Yield of similar quality (commonly known as "junk bonds") may be subject
Risk to greater levels of interest rate, credit and liquidity risk than
Funds that do not invest in such securities. The Growth & Income
Fund is particularly susceptible to this risk. These securities
are considered predominantly speculative with respect to the
issuer's continuing ability to make principal and interest
payments. An economic downturn or period of rising interest rates
could adversely affect the market for these securities and reduce
a Fund's ability to sell them .
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 September 30, 2000, PIMCO Advisors and its subsidiary
partnerships had approximately $272 billion in assets under
management.
PIMCO Advisors has retained investment management firms ("Sub-
Advisers") to manage the investments of the Capital Appreciation,
Mid-Cap, Allianz Select International and Tax-Efficient Equity
Funds. The PIMCO Equity Advisors division of PIMCO Advisors
manages the investments of the Equity Income, Global Innovation,
Growth, Growth & Income, 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 LLC ("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.
Prospectus 34
<PAGE>
For the fiscal year ended June 30, 2000, 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, Tax-
Efficient Equity and Value Funds 0.45%
Growth Fund 0.50%
Target Fund 0.55%
Renaissance and Select Growth Funds 0.60%*
Growth & Income Fund 0.63%*
Innovation Fund 0.65%
Allianz Select International Fund 0.75%*
</TABLE>
* On April 1, 2000, the advisory fee rate for the Select Growth
Fund increased from 0.57% to 0.60% per annum. On May 8, 2000, the
advisory fee rate for the Allianz Select International Fund
decreased from 0.85% to 0.75% per annum. On August 1, 2000, the
advisory fee rate for the Growth & Income Fund decreased from
0.63% to 0.60% per annum.
The Global Innovation Fund was not operational during the entire
fiscal year ended June 30, 2000. The annual investment advisory
fee rate payable by this Fund is 1.00% (stated as a percentage of
the average daily net assets of the Fund).
Administrative
Fees
Each Fund pays for the administrative services it requires under a
fee structure which is essentially fixed. Class D shareholders of
each Fund pay an administrative fee to PIMCO Advisors, computed as
a percentage of the Fund's assets attributable in the aggregate to
Class D shares. PIMCO Advisors, in turn, provides or procures
administrative services for Class D shareholders and also bears
the costs of most third-party services required by the Funds,
including audit, custodial, portfolio accounting, legal, transfer
agency and printing costs. The Funds do bear other expenses which
are not covered under the administrative fee which may vary and
affect the total level of expenses paid by Class D shareholders,
such as brokerage fees, commissions and other transaction
expenses, costs of borrowing money, including interest expenses,
and fees and expenses of the Trust's disinterested Trustees.
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).
Class D shareholders of the Funds pay PIMCO Advisors monthly
administrative fees at the following annual rates (stated as a
percentage of the average daily net assets attributable in the
aggregate to the Fund's Class D shares):
<TABLE>
<CAPTION>
Fund Administrative Fees*
----------------------------------------------------------------
<S> <C>
Capital Appreciation, Equity Income, Growth,
Innovation, Mid-Cap, Renaissance, Select
Growth, Target, Tax-Efficient Equity and
Value Funds 0.65%
Growth & Income Fund 0.75%
Global Innovation Fund 0.85%
Allianz Select International Fund 0.95%
</TABLE>
*As described below under "12b-1 Plan for Class D Shares," the
administration agreement includes a plan adopted in conformity
with Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act") which provides for the payment of up to 0.25% of the
0.65% (0.75% for the Growth & Income Fund, 0.85% for the Global
Innovation Fund and 0.95% for the Allianz Select International
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% (0.75% for the Growth & Income Fund, 0.85% for
the Global Innovation Fund and 0.95% for the Allianz Select
International Fund) Administrative Fee rate under two separate
columns entitled "Distribution and/or Service (12b-1) Fees"
(0.25%) and "Other Expenses" (0.40%) (0.50% for the Growth &
Income Fund, 0.60% for the Global Innovation Fund and 0.70% for
the Select International Fund).
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.
35 PIMCO Funds: Multi-Manager Series
<PAGE>
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 Equity Income, Global Innovation, Growth, Growth & Income, Innovation, Renaissance,
division of PIMCO Advisors Select Growth, Target and Value
("PIMCO Equity Advisors")
1345 Avenue of the
Americas, 50th Floor
New York, NY 10105
-------------------------------------------------------------------------------------------------------------
PIMCO/Allianz International Allianz Select International
Advisors LLC ("PAIA")
1345 Avenue of the Americas
50th Floor
New York, NY 10105
-------------------------------------------------------------------------------------------------------------
Cadence Capital Management Capital Appreciation and Mid-Cap
("Cadence")
Exchange Place, 53 State
Street
Boston, MA 02109
-------------------------------------------------------------------------------------------------------------
Parametric Portfolio Tax-Efficient Equity
Associates
("Parametric")
7310 Columbia Center
701 Fifth Avenue
Seattle, WA 98104
</TABLE>
*PIMCO Equity Advisors is a division of PIMCO Advisors. PAIA is a
wholly-owned subsidiary of PIMCO Advisors. Cadence and NFJ are
affiliated sub-partnerships 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. Accounts managed by PIMCO Equity Advisors had combined
assets as of September 30, 2000 of approximately $14.5 billion.
See "Investment Adviser and Administrator" above for additional
information about PIMCO Advisors.
The following individuals at PIMCO Equity Advisors have primary
responsibility for the noted Funds. 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 and Growth & Income Funds 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.
Jiyoung Kim 2000 Senior Research Analyst
for PIMCO Innovation
Fund, where she covers
biotechnology,
telecommunications
equipment,
semiconductors and
networking. Prior to
joining PIMCO Equity
Advisors in 1999, she
was a Senior Research
Analyst at Fred Alger
Management from 1994 to
1999. Prior to that, she
was a Senior Research
Technician at Repligen,
a biopharmaceutical
company.
Growth Mr. Corba 1999 See above.
Growth & Income Mr. Corba 1999 See above.
Peter C. Thoms 2000 Investment Analyst at
Federated Investors from
July 1998 to May 1999.
Previously, he received
his M.B.A. at the
University of Virginia's
Darden School of
Business.
</TABLE>
Prospectus 36
<PAGE>
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
-----------------------------------------------------------------------------------------
<C> <C> <C> <S>
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.
</TABLE>
-------
+ 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.
PAIA A wholly-owned subsidiary of PIMCO Advisors, PAIA provides
international advisory services to mutual funds. PAIA commenced
operations during the fourth quarter of 2000. Different firms
served as sub-adviser to the Allianz Select International Fund
prior to November 1, 2000.
The following individuals at PAIA share primary responsibility
for the Allianz Select International Fund.
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
-----------------------------------------------------------------------------------------
<C> <C> <C> <S>
Allianz Select International Udo Frank (lead manager) 2000 Managing Director and
Chief Investment Officer
of Allianz Asset
Advisory and Management
GmbH ("Allianz AAM"),
responsible for the
entire area (since
1997), and Chief
Executive Officer and
Chief Investment Officer
of Allianz PIMCO Asset
Management. Previously,
he served as the Chief
Investment Officer of
Allianz KAG (since
1994).
Wolfram Gerdes (co-manager) 2000 Managing Director of
Equity Portfolio
Management at Allianz
AAM since 1998. Prior to
joining Allianz AAM, he
held various positions,
including head of
Portfolio Management,
with Allianz
Lebensversicherungs AG
from 1992 to 1998.
Gerd Wolfgang Hintz (co-manager) 2000 Managing Director of the
Equity Research
Department at Allianz
AAM since 1998. In
addition, he has been
responsible for Allianz
AAM's trading department
since January 2000.
Previously, he was the
head of Research and
Investor Relations of
Allianz AG.
</TABLE>
37 PIMCO Funds: Multi-Manager Series
<PAGE>
Cadence An affiliated sub-partnership of PIMCO Advisors, Cadence provides
advisory services to mutual funds and institutional accounts.
Cadence Capital Management Corporation, the predecessor investment
adviser to Cadence, commenced operations in 1988. Accounts managed
by Cadence had combined assets as of September 30, 2000 of
approximately $6.8 billion.
The following individuals at Cadence share primary responsibility
for each of the noted Funds.
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
-------------------------------------------------------------------
<C> <C> <C> <S>
Capital David B. Breed 1991 Managing Director, Chief
Appreciation (Inception) Executive Officer, Chief
Investment Officer and
founding partner of
Cadence. Member of the
Management Board of
PIMCO Advisors. He is a
research generalist and
has lead the team of
portfolio managers and
analysts since 1988. Mr.
Breed has managed
separate equity accounts
for many institutional
clients and has lead the
team that manages the
PIMCO Funds sub-advised
by Cadence since those
Funds' inception dates.
William B. Bannick 1992 Managing Director and
Executive Vice President
at Cadence. Mr. Bannick
is a research generalist
and Senior Portfolio
Manager for the Cadence
team. He has managed
separately managed
equity accounts for
various Cadence
institutional clients
and has been a member of
the team that manages
the PIMCO Funds sub-
advised by Cadence since
joining Cadence in 1992.
Katherine A. Burdon 1993 Managing Director and
Senior Portfolio Manager
at Cadence. Ms. Burdon
is a research generalist
and has managed
separately managed
equity accounts for
various Cadence
institutional clients
and has been a member of
the team that manages
the PIMCO Funds sub-
advised by Cadence since
joining Cadence in 1993.
Peter B. McManus 1994 Director, Account
Management at Cadence.
He has been a member of
the investment team at
Cadence and handles
client relationships of
separately managed
accounts, and has been a
member of the team that
manages the PIMCO Funds
sub-advised by Cadence
since joining Cadence in
1994. Previously, he
served as a Vice
President of Bank of
Boston from 1991
to 1994.
Mid-Cap Messrs. Breed, Same as See above.
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 September
30, 2000 of approximately $4.4 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>
Adviser/Sub- Shareholders of each Fund (except the Innovation and Mid-Cap
Adviser Funds) have approved a proposal permitting PIMCO Advisors to enter
Relationship into new or amended sub-advisory agreements with one or more sub-
advisers with respect to each Fund without obtaining shareholder
approval of such agreements, subject to the conditions of an
exemptive order that has been granted by the Securities and
Exchange Commission. One of the conditions requires the Board of
Trustees to approve any such agreement. In
Prospectus 38
<PAGE>
addition, the exemptive order prohibits PIMCO Advisors from
entering into sub-advisory agreements with affiliates of PIMCO
Advisors without shareholder approval, unless those affiliates are
substantially wholly-owned by PIMCO Advisors. PIMCO Advisors has
the ultimate responsibility to oversee the Sub-Advisers and to
recommend their hiring, termination and replacement.
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 procedures established by the
Board of Trustees, with reference to other securities or indices.
Short-term investments having a maturity of 60 days or less are
generally valued at amortized cost. Exchange traded options,
futures and options on futures are valued at the settlement price
determined by the exchange. Other securities for which market
quotes are not readily available are valued at fair value as
determined in good faith by the Board of Trustees or persons
acting at their direction.
Investments initially valued in currencies other than the U.S.
dollar are converted to U.S. dollars using exchange rates obtained
from pricing services. As a result, the NAV of a Fund's shares may
be affected by changes in the value of currencies in relation to
the U.S. dollar. The value of securities traded in markets outside
the United States or denominated in currencies other than the U.S.
dollar may be affected significantly on a day that the New York
Stock Exchange is closed and an investor is not able to purchase,
redeem or exchange shares. In particular, calculation of the NAV
of the Global Innovation and Allianz Select International Funds
may not take place contemporaneously with the determination of the
prices of foreign securities used in NAV calculations.
Fund shares are valued at the close of regular trading (normally
4:00 p.m., Eastern time) (the "NYSE Close") on each day that the
New York Stock Exchange is open. For purposes of calculating the
NAV, the Funds normally use pricing data for domestic equity
securities received shortly after the NYSE Close and do not
normally take into account trading, clearances or settlements that
take place after the NYSE Close. 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 or persons acting at their direction 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
39 PIMCO Funds: Multi-Manager Series
<PAGE>
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 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.
Prospectus 40
<PAGE>
Investment The following investment minimums apply for purchases of Class D
Minimums shares.
<TABLE>
<CAPTION>
Initial Investment Subsequent Investments
-----------------------------------------------------
<S> <C>
$2,500 per Fund $100 per Fund
</TABLE>
Your financial service firm may impose different investment
minimums than the Trust. For example, if your firm maintains an
omnibus account with a particular Fund, the firm may impose higher
or lower investment minimums than the Trust when you invest in
Class D shares of the Fund through your firm. Please contact your
firm for information.
Exchanging 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.
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
In Kind
The Trust has agreed to redeem shares of each Fund solely in cash
up to the lesser of $250,000 or 1% of the Fund's net assets during
any 90-day period for any one shareholder. In consideration of the
best interests of the remaining shareholders, the Trust 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
41 PIMCO Funds: Multi-Manager Series
<PAGE>
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 Fund .
-------------------------------------------------------------------
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.
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.
Prospectus 42
<PAGE>
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. Shareholders of the Global Innovation and Allianz
Select International Funds may be entitled to claim a credit or
deduction with respect to foreign taxes.
This section relates only to federal income tax consequences of
investing in the Funds; the consequences under other tax laws may
differ. You should consult your tax advisor as to the possible
application of foreign, state and local income tax laws to Fund
dividends and capital distributions. Please see the Statement of
Additional Information for additional information regarding the
tax aspects of investing in the Funds.
Characteristics and Risks of Securities
and Investment Techniques
This section provides additional information about some of the
principal investments and related risks of the Funds identified
under "Summary Information" above. It also describes
characteristics and risks of additional securities and investment
techniques that are not necessarily principal investment
strategies but may be used by the Funds from time to time. Most of
these securities and investment techniques are discretionary,
which means that the portfolio managers can decide whether to use
them or not. This Prospectus does not attempt to disclose all of
the various types of securities and investment techniques that may
be used by the Funds. As with any mutual fund, investors in the
Funds must rely on the professional investment judgment and skill
of PIMCO Advisors, the Sub-Advisers and the individual portfolio
managers. Please see "Investment Objectives and Policies" in the
Statement of Additional Information for more detailed information
about the securities and investment techniques described in this
section and about other strategies and techniques that may be used
by the Funds.
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, Allianz Select International, 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
43 PIMCO Funds: Multi-Manager Series
<PAGE>
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 Growth & Income Fund will invest primarily in
common stocks, but may also invest significant portions of its
assets in preferred stocks, fixed income securities, convertible
securities and real estate investment trusts, or "REITs." The
Growth & Income Fund may temporarily hold up to 100% of its 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 Allianz Select International Fund
may also hold up to 100% of its assets in other domestic fixed
income, foreign fixed income and equity securities principally
traded in the U.S., including obligations issued or guaranteed by
a foreign government or its agencies, authorities or
instrumentalities, corporate bonds and American Depository
Receipts, for temporary defensive purposes. The temporary
defensive strategies described in this paragraph would be
inconsistent with the investment objective and principal
investment strategies of each of the noted Funds and may adversely
affect the Fund's ability to achieve its investment objective.
Companies 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
Capital- and therefore have substantial exposure to the risks described
izations below. The Growth & Income, Mid-Cap, Allianz Select International
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 and
generally less well-known or seasoned 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.
Initial The Funds, particularly the Global Innovation Fund, may purchase
Public securities in intial public offerings (IPOs). These securities are
Offerings 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. At any particular
time or from time to time a Fund may not be able to invest in
securities issued in IPOs, or invest to the extent desired
because, for example, only a small portion (if any) of the
securities being offered in an IPO may be made available to the
Fund. In addition, under certain market conditions a relatively
small number of companies may issue securities in IPOs. Similarly,
as the number of Funds to which IPO securities are allocated
increases, the number of securities issued to any one Fund may
decrease. The investment performance of a Fund during periods when
it is unable to invest significantly or at all in IPOs may be
lower than during periods when the Fund is able to do so. In
addition, as a Fund increases in size, the impact of IPOs on the
Fund's performance will generally decrease.
Prospectus 44
<PAGE>
Foreign The Allianz Select International Fund normally invests principally
(non- in securities of foreign issuers, securities traded principally in
U.S.) securities markets outside the United States and/or securities
Securities denominated in foreign currencies (together, "foreign
securities"). The Global Innovation Fund will invest in the
securities of issuers located in at least three countries (one of
which may be the United States). The Equity Income, Growth, Growth
& Income, Innovation, Renaissance, 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"). The Select
Growth Fund may invest up to 25% of its assets in foreign
securities. Each of these Funds may invest without limit in ADRs
(defined below). The Tax-Efficient Equity Fund may invest in
common stocks of foreign issuers if included in the S&P 500 Index.
All of the Funds may invest in American Depository Receipts
(ADRs). In addition, the Equity Income, Global Innovation, Growth,
Growth & Income, Innovation, Renaissance, Select Growth, Allianz
Select International, 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 and Allianz
Select International Funds may invest significant portions of
their assets in emerging market securities. Investing in emerging
market securities imposes risks different from, or greater than,
risks of investing in domestic securities or in foreign, developed
countries. These risks include: smaller market capitalization of
securities markets, which may suffer periods of relative
illiquidity; significant price volatility; restrictions on foreign
investment; and possible repatriation of investment income and
capital. In addition, foreign investors may be required to
register the proceeds of sales and future economic or political
crises could lead to price controls, forced mergers, expropriation
or confiscatory taxation, seizure, nationalization or the creation
of government monopolies. The currencies of emerging market
countries may experience significant declines against the U.S.
dollar, and devaluation may occur subsequent to investments in
these currencies by a Fund. Inflation and rapid fluctuations in
inflation rates have had, and may continue to have, negative
effects on the economies and securities markets of certain
emerging market countries.
Additional risks of emerging market securities may include:
greater social, economic and political uncertainty and
instability; more substantial governmental involvement in the
economy; less governmental supervision and regulation;
unavailability of currency hedging techniques; companies that are
newly organized and small; differences in auditing and financial
reporting standards, which may result in unavailability of
material information about issuers; and less developed legal
systems. In addition, emerging securities markets may have
different clearance and settlement procedures, which may be unable
to keep pace with the volume of securities transactions or
otherwise make it difficult to engage in such transactions.
Settlement problems may cause a Fund to miss attractive investment
opportunities, hold a portion of its assets in cash pending
investment, or be delayed in disposing of a portfolio security.
Such a delay could result in possible liability to a purchaser of
the security.
45 PIMCO Funds: Multi-Manager Series
<PAGE>
Special Risks of Investing in Russian and Other Eastern European
Securities. Each of the Global Innovation and Allianz Select
International Funds may invest a significant portion of its assets
in securities of issuers located in Russia and in other Eastern
European countries. While investments in securities of such
issuers are subject generally to the same risks associated with
investments in other emerging market countries described above,
the political, legal and operational risks of investing in Russian
and other Eastern European issuers, and of having assets custodied
within these countries, may be particularly acute. A risk of
particular note with respect to direct investment in Russian
securities is the way in which ownership of shares of companies is
normally recorded. When a Fund invests in a Russian issuer, it
will normally receive a "share extract," but that extract is not
legally determinative of ownership. The official record of
ownership of a company's share is maintained by the company's
share registrar. Such share registrars are completely under the
control of the issuer, and investors are provided with few legal
rights against such registrars.
Foreign A Fund that invests directly in foreign currencies or in
Currencies securities that trade in, and receive revenues in, foreign
currencies will be subject to currency risk. The Global Innovation
and Allianz Select International Funds are particularly sensitive
to this risk.
Foreign currency exchange rates may fluctuate significantly over
short periods of time. They generally are determined by supply and
demand and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other
complex factors. Currency exchange rates also can be affected
unpredictably by intervention (or the failure to intervene) by
U.S. or foreign governments or central banks, or by currency
controls or political developments. For example, uncertainty
surrounds the introduction of the euro (a common currency unit for
the European Union) and the effect it may have on the value of
European currencies as well as 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, Growth & Income, Innovation, Renaissance,
Select Growth, Allianz Select International, Target and Value
Funds may enter into forward foreign currency exchange contracts,
primarily to reduce the risks of adverse changes in foreign
exchange rates. In addition, the Global Innovation and Allianz
Select International Funds may buy and sell foreign currency
futures contracts and options on foreign currencies and foreign
currency futures. A forward foreign currency exchange contract,
which involves an obligation to purchase or sell a specific
currency at a future date at a price set at the time of the
contract, reduces a Fund's exposure to changes in the value of the
currency it will deliver and increases its exposure to changes in
the value of the currency it will receive for the duration of the
contract. The effect on the value of a Fund is similar to selling
securities denominated in one currency and purchasing securities
denominated in another currency. Contracts to sell foreign
currency would limit any potential gain which might be realized by
a Fund if the value of the hedged currency increases. A Fund may
enter into these contracts to hedge against foreign exchange risk
arising from the Fund's investment or anticipated investment in
securities denominated in foreign currencies. Suitable hedging
transactions may not be available in all circumstances and there
can be no assurance that a Fund will engage in such transactions
at any given time or from time to time. Also, such transactions
may not be successful and may eliminate any chance for a Fund to
benefit from favorable fluctuations in relevant foreign
currencies.
The Global Innovation and Allianz Select International Funds may
also enter into these contracts for purposes of increasing
exposure to a foreign currency or to shift exposure to foreign
currency fluctuations from one currency to another. To the extent
that it does so, 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
and Allianz Select International Funds may use one currency (or
basket of currencies) to hedge against adverse changes in the
value of another currency (or 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.
Corporate Each Fund that may invest in fixed income securities may invest in
Debt corporate debt securities. The Growth & Income Fund may invest up
Securities to 10% of its assets in these securities. Corporate debt
securities are subject to the risk of the issuer's inability to
meet principal and interest payments on the obligation and may
also be subject to price volatility due to factors such as
interest rate sensitivity, market perception of the
creditworthiness of the issuer and general market liquidity. When
interest rates rise,
Prospectus 46
<PAGE>
the value of corporate debt securities can be expected to decline.
Debt securities with longer durations tend to be more sensitive to
interest rate movements than those with shorter durations.
Convertible Each Fund may invest in convertible securities. The Growth &
Securities Income Fund may place particular emphasis on convertible
securities. Convertible 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 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. In addition, 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.
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,
Growth & Income, Innovation, Renaissance, Select Growth, Allianz
Select International, 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 Global Innovation, Allianz Select International and Tax-
Efficient Equity Funds 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
47 PIMCO Funds: Multi-Manager Series
<PAGE>
in that Fund will tend to be more volatile, resulting in larger
gains or losses in response to market changes. To limit leverage
risk, each Fund will segregate assets determined to be liquid by
PIMCO Advisors or a Sub-Adviser in accordance with procedures
established by the Board of Trustees (or, as permitted by
applicable regulation, enter into certain offsetting positions) to
cover its obligations under derivative instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that a Fund
will engage in derivatives transactions at any time or from time
to time. A Fund's ability to use derivatives may also be limited
by certain regulatory and tax considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the risk that the market value of the
instrument will change in a way detrimental to a Fund's interest.
If a portfolio manager incorrectly forecasts the values of
securities, currencies or interest rates or other economic factors
in using derivatives for a Fund, the Fund might have been in a
better position if it had not entered into the transaction at all.
While some strategies involving derivative instruments can reduce
the risk of loss, they can also reduce the opportunity for gain or
even result in losses by offsetting favorable price movements in
other Fund investments. A Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to a Fund. Also, the value of
derivatives may not correlate perfectly, or at all, with the value
of the assets, reference rates or indexes they are designed to
closely track. In addition, a Fund's use of derivatives may cause
the Fund to realize higher amounts of short-term capital gains
(taxed at ordinary income tax rates when distributed to
shareholders who are individuals) than if the Fund had not used
such instruments.
Equity- The Funds may invest in equity-linked securities. The Allianz
Linked Select International Fund may invest up to 15% of its assets in
Securities equity-linked securities. Equity-linked securities are privately
issued securities whose investment results are designed to
correspond generally to the performance of a specified stock index
or "basket" of stocks, or sometimes a single stock. To the extent
that the Funds invest in equity-linked securities whose return
corresponds to the performance of a foreign securities index or
one or more of foreign stocks, investing in equity-linked
securities will involve risks similar to the risks of investing in
foreign securities. See "Foreign Securities" above. In addition,
the Funds bear the risk that the issuer of an equity-linked
security may default on its obligations under the security.
Equity-linked securities may be considered illiquid and thus
subject to each Fund's restrictions on investments in illiquid
securities.
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.
High Securities rated lower than Baa by Moody's or lower than BBB by
Yield S&P are sometimes referred to as "high yield securities" or "junk
Securities bonds." The Funds, particularly the Growth & Income Fund, may
invest in these securities. Investing in these securities involves
special risks in addition to the risks associated with investments
in higher-rated fixed income securities. While offering a greater
potential
Prospectus 48
<PAGE>
opportunity for capital appreciation and higher yields, these
securities may be subject to greater levels of interest rate,
credit and liquidity risk, may entail greater potential price
volatility and may be less liquid than higher-rated securities.
These securities may be regarded as predominantly speculative with
respect to the issuer's continuing ability to meet principal and
interest payments. They may also be more susceptible to real or
perceived adverse economic and competitive industry conditions
than higher-rated securities.
Loans of For the purpose of achieving income, each Fund may lend its
Portfolio portfolio securities to brokers, dealers, and other financial
Securities institutions provided a number of conditions are satisfied,
including that the loan is fully collateralized. Please see
"Investment Objectives and Policies" in the Statement of
Additional Information for details. When a Fund lends portfolio
securities, its investment performance will continue to reflect
changes in the value of the securities loaned, and the Fund will
also receive a fee or interest on the collateral. Securities
lending involves the risk of loss of rights in the collateral or
delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. A Fund may pay
lending fees to the party arranging the loan.
Short Each Fund may make short sales as part of its overall portfolio
Sales management strategies or to offset a potential decline in the
value of a security. A short sale involves the sale of a security
that is borrowed from a broker or other institution to complete
the sale. A Fund may only enter into short selling transactions if
the security sold short is held in the Fund's portfolio or if the
Fund has the right to acquire the security without the payment of
further consideration. For these purposes, a Fund may also hold or
have the right to acquire securities which, without the payment of
any further consideration, are convertible into or exchangeable
for the securities sold short. Short sales expose a Fund to the
risk that it will be required to acquire, convert or exchange
securities to replace the borrowed securities (also known as
"covering" the short position) at a time when the securities sold
short have appreciated in value, thus resulting in a loss to the
Fund.
When- Each Fund may purchase securities which it is eligible to purchase
Issued, on a when-issued basis, may purchase and sell such securities for
Delayed delayed delivery and may make contracts to purchase such
Delivery securities for a fixed price at a future date beyond normal
and settlement time (forward commitments). When-issued transactions,
Forward delayed delivery purchases and forward commitments involve a risk
Commitment of loss if the value of the securities declines prior to the
Transactionssettlement date. This risk is in addition to the risk that the
Fund's other assets will decline in value. Therefore, these
transactions may result in a form of leverage and increase a
Fund's overall investment exposure. Typically, no income accrues
on securities a Fund has committed to purchase prior to the time
delivery of the securities is made, although a Fund may earn
income on securities it has segregated to cover these positions.
Repurchase Each Fund may enter into repurchase agreements, in which the Fund
Agreements purchases a security from a bank or broker-dealer that agrees to
repurchase the security at the Fund's cost plus interest within a
specified time. If the party agreeing to repurchase should
default, the Fund will seek to sell the securities which it holds.
This could involve procedural costs or delays in addition to a
loss on the securities if their value should fall below their
repurchase price. Those Funds whose investment objectives do not
include the earning of income will invest in repurchase agreements
only as a cash management technique with respect to that portion
of its portfolio maintained in cash. Repurchase agreements
maturing in more than seven days are considered illiquid
securities.
Reverse Each Fund may enter into reverse repurchase agreements, subject to
Repurchase the Fund's limitations on borrowings. A reverse repurchase
Agreements agreement involves the sale of a security by a Fund and its
And Other agreement to repurchase the instrument at a specified time and
Borrowings price, and may be considered a form of borrowing for some
purposes. A Fund will segregate assets determined to be liquid by
PIMCO Advisors or a Sub-Adviser in accordance with procedures
established by the Board of Trustees to cover its obligations
under reverse repurchase agreements. A Fund also may borrow money
for investment purposes subject to any policies of the Fund
currently described in this Prospectus or in the Statement of
Additional Information. Reverse repurchase agreements and other
forms of borrowings may create leveraging risk for a Fund.
Illiquid
Securities
Each Fund may invest in securities that are illiquid so long as
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
49 PIMCO Funds: Multi-Manager Series
<PAGE>
securities. The term "illiquid securities" for this purpose means
securities that cannot be disposed of within seven days in the
ordinary course of business at approximately the amount at which a
Fund has valued the securities. Please see "Investment Objectives
and Policies" in the Statement of Additional Information for a
listing of various securities that are generally considered to be
illiquid for these purposes. Restricted securities, i.e.,
securities subject to legal or contractual restrictions on resale,
may be illiquid. However, some restricted securities (such as
securities issued pursuant to Rule 144A under the Securities Act
of 1933 and certain commercial paper) may be treated as liquid,
although they may be less liquid than registered securities traded
on established secondary markets.
Investment The Allianz Select International Fund may invest up to 10% of its
in Other assets in securities of other investment companies, such as
Investment closed-end management investment companies, or in pooled accounts
Companies or other investment vehicles which invest in foreign markets. Each
of the other Funds may invest up to 5% of its assets in other
investment companies. As a shareholder of an investment company, a
Fund may indirectly bear service and other fees which are in
addition to the fees the Fund pays its service providers.
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.
Funds, such as the Growth & Income, Select Growth and Allianz
Select International Funds, that have recently changed Sub-
Advisers and/or investment objectives and policies may experience
increased portfolio turnover due to the differences between the
Funds' previous and current investment objectives and policies and
portfolio management strategies.
Changes The investment objective of each of the Global Innovation, Growth,
in Growth & Income, Innovation, Renaissance, Select Growth, Allianz
Investment Select International, Target and Tax-Efficient Equity Funds
Objectives described in this Prospectus may be changed by the Board of
and Trustees without shareholder approval. The investment objective of
Policies each other Fund is fundamental and may not be changed 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 and In addition to the risks described under "Summary of Principal
Smaller- Risks" above and in this section, several of the Funds are newly
Sized formed and therefore have limited or no performance history for
Funds investors to evaluate. Also, it is possible that newer Funds and
smaller-sized Funds may invest in securities offered in initial
public offerings and other types of transactions (such as private
placements) which, because of the Funds' size, have a
disproportionate impact on the Funds' performance results. The
Funds would not necessarily have achieved the same performance
results if their aggregate net assets had been greater.
Percentage
Investment Unless otherwise stated, all percentage limitations on Fund
Limitations investments listed in this Prospectus will apply at the time of
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
Investments
and
Techniques
The Funds may invest in other types of securities and use a
variety of investment techniques and strategies which are not
described in this Prospectus. These securities and techniques may
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 50
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Class D shares of each Fund since the
class of shares was first offered. Certain information reflects
financial results for a single Fund share. The total returns in
the table represent the rate that an investor would have earned or
lost on an investment in Class D shares of a Fund, assuming
reinvestment of all dividends and distributions. This information
has been audited by PricewaterhouseCoopers LLP, whose report,
along with each Fund's financial statements, are included in the
Trust's annual report to shareholders. The annual report is
incorporated by reference in the Statement of Additional
Information and is available free of charge upon request from the
Distributor. The Growth & Income and Allianz Select International
Funds did not offer Class D shares during the periods shown.
<TABLE>
<CAPTION>
Dividends in
Net Realized/ Total Income Dividends Excess
Year or Net Asset Value Net Unrealized (Loss) From Net of Net
Period Beginning Investment Gain (Loss) on From Investment Investment Investment
Ended of Period Income (Loss) Investments Operations Income Income
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capital Appreciation Fund
06/30/00 $26.63 $(0.03)(a) $ 5.36 (a) $ 5.33 $(0.05) $(0.03)
06/30/99 26.01 0.06 (a) 2.34 (a) 2.40 (0.13) 0.00
04/08/98-
06/30/98 25.41 0.02 (a) 0.58 (a) 0.60 0.00 0.00
Equity Income Fund
(i)
06/30/00 $15.59 $ 0.35 (a) $ (2.44)(a) $ (2.09) $(0.29) $ 0.00
06/30/99 16.04 0.40 (a) 1.27 (a) 1.67 (0.36) 0.00
04/08/98-
06/30/98 16.71 0.09 (a) (0.66)(a) (0.57) (0.10) 0.00
Global Innovation
Fund
03/31/00-
06/30/00 $20.17 $(0.04)(a) $ (1.19)(a) $ (1.23) $ 0.00 $ 0.00
Growth Fund
01/31/00-
06/30/00 $32.84 $(0.11) $ 2.03 $ 1.92 $ 0.00 $ 0.00
Innovation Fund
(i)
06/30/00 $37.52 $(0.59)(a) $42.18 (a) $41.59 $ 0.00 $ 0.00
06/30/99 24.28 (0.29)(a) 14.79 (a) 14.50 0.00 0.00
04/08/98-
06/30/98 21.50 (0.05)(a) 2.83 (a) 2.78 0.00 0.00
Mid-Cap Fund (ii)
06/30/00 $22.90 $(0.01)(a) $ 7.85 (a) $ 7.84 $(0.01) $ 0.00
06/30/99 23.99 0.03 (a) (0.04)(a) (0.01) (0.01) 0.00
04/08/98-
06/30/98 23.97 0.00 (a) 0.02 (a) 0.02 0.00 0.00
Renaissance Fund
(i)
06/30/00 $18.22 $ 0.35 (a) $(0.13)(a) $ 0.22 $ 0.00 $ 0.00
06/30/99 19.10 0.00 (a) 1.45 (a) 1.45 0.00 0.00
04/08/98-
06/30/98 18.99 0.01 (a) 0.10 (a) 0.11 0.00 0.00
Select Growth Fund
(iii)
03/31/00-
06/30/00 $23.25 $ 0.01 (a) $ 0.74 (a) $ 0.75 $ 0.00 $ 0.00
Target Fund
06/09/00-
06/30/00 $30.46 $(0.01)(a) $ 0.69 (a) $ 0.68 $ 0.00 $ 0.00
Tax-Efficient Equity Fund
06/30/00 $11.59 $ 0.02 (a) $ 0.61 (a) $ 0.63 $ 0.00 $ 0.00
07/10/98-
06/30/99 10.00 0.03 (a) 1.56 (a) 1.59 0.00 0.00
Value Fund (i)
06/30/00 $15.29 $ 0.23 (a) $(1.34)(a) $(1.11) $(0.24) $ 0.00
06/30/99 15.64 0.23 (a) 1.37 (a) 1.60 (0.23) 0.00
04/08/98-
06/30/98 15.99 0.04 (a) (0.34)(a) (0.30) (0.05) 0.00
<CAPTION>
Distributions
Year or From Net
Period Realized Capital
Ended Gains
-------------------------------------------------------------------------------------------------------------------
<S> <C>
Capital Appreciation Fund
06/30/00 $(5.00)
06/30/99 (1.65)
04/08/98-
06/30/98 0.00
Equity Income Fund
(i)
06/30/00 $(0.48)
06/30/99 (1.76)
04/08/98-
06/30/98 0.00
Global Innovation
Fund
03/31/00-
06/30/00 $ 0.00
Growth Fund
01/31/00-
06/30/00 $ 0.00
Innovation Fund
(i)
06/30/00 $(6.39)
06/30/99 (1.26)
04/08/98-
06/30/98 0.00
Mid-Cap Fund (ii)
06/30/00 $(0.02)
06/30/99 (1.07)
04/08/98-
06/30/98 0.00
Renaissance Fund
(i)
06/30/00 $(2.59)
06/30/99 (2.33)
04/08/98-
06/30/98 0.00
Select Growth Fund
(iii)
03/31/00-
06/30/00 $ 0.00
Target Fund
06/09/00-
06/30/00 $ 0.00
Tax-Efficient Equity Fund
06/30/00 $ 0.00
07/10/98-
06/30/99 0.00
Value Fund (i)
06/30/00 $(0.57)
06/30/99 (1.72)
04/08/98-
06/30/98 0.00
</TABLE>
-------
* Annualized
(a)Per share amounts based upon average number of shares outstanding during the
period.
(b)If the investment manager had not reimbursed expenses, the ratio of operat-
ing expenses to average net assets would have been 1.94% for the period ended
June 30, 2000.
(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.
(ii) Formerly the Mid-Cap Growth Fund.
(iii) Formerly the PIMCO Core Equity Fund. The Fund changed its investment
objective and policies on April 1, 2000; the performance results shown
above would not necessarily have been achieved had the Fund's current
objective and policies been in effect during the periods shown. In
addition, the performance results shown above reflect the Fund's advisory
fee level in effect prior to April 1, 2000; these results would have been
lower had the Fund's current advisory fee level then been in effect.
51 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ditributionss Ratio of Investment
i Excess ofn Net Asset Expenses to Income (Loss) to
Nt Realizede Total Value End of Net Assets End Average Net Average Net Portfolio
Caital Gainsp Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 0.00 $(5.08) $26.88 22.84% $ 524 1.11% (0.10)% 119%
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
$(2.16) $(2.93) $10.57 (13.15)% $ 4 1.12% 2.93% 114%
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 $ 0.00 $18.94 (6.10)% $ 146 1.85%(b)* (0.90)%* 131%
$ 0.00 $ 0.00 $34.76 5.85% $ 11 1.16%* (0.78)%* 72%
$ 0.00 $(6.39) $72.72 115.85% $85,096 1.30% (0.93)% 186%
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 $(0.03) $30.71 34.24% $ 796 1.11% (0.05)% 164%
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
$(0.86) $(3.45) $14.99 3.56% $ 1,286 1.25% 2.21% 133%
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 $24.00 3.23% $ 10 1.25% 0.11% 170%
$ 0.00 $ 0.00 $31.14 2.23% $ 10 1.20%* (0.69)%* 99%
$ 0.00 $ 0.00 $12.22 5.44% $ 11 1.11% 0.16% 32%
0.00 0.00 11.59 15.90 869 1.11* 0.30* 13
$(2.00) $(2.81) $11.37 (7.07)% $ 46 1.11% 1.71% 196%
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 52
<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
53 PIMCO Funds: Multi-Manager Series
<PAGE>
---------------------------------------------------------------------
PIMCO INVESTMENT ADVISER AND ADMINISTRATOR
Funds: PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Multi- 92660
Manager ---------------------------------------------------------------------
Series SUB-ADVISERS
PIMCO Equity Advisors division of PIMCO Advisors L.P., PIMCO/Allianz
Investment Advisors LLC, 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., P.O. Box 9688, Providence, RI 02940
---------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
---------------------------------------------------------------------
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
---------------------------------------------------------------------
For further information about the PIMCO Funds, call 1-800-426-0107
or visit our Web site at www.pimcofunds.com.
Not part of the Prospectus
<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 Innovation Center
The all-new PIMCO Funds Innovation Center is an invaluable resource for tech
investors and those contemplating an investment in this complex, fast-moving
sector. Dedicated to the research and analysis of technology, the Center
provides a number of key resources, including:
|_| Innovation Newsletter--An online version of our popular technology investing
newsletter, featuring the latest market analysis and outlook from Dennis
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Daily Manager Commentary
PIMCO's Daily Manager Commentary provides investment insights from PIMCO's fund
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PZ006.11/00 Not part of the Prospectus
--------------------------------------------------------------------------------
-----------------
[LOGO OF PIMCO FUNDS] PRESORTED
STANDARD
U.S. POSTAGE
PAID
SMITHTOWN, NY
PERMIT NO. 700
-----------------
PIMCO Funds
Distributors LLC
2187 Atlantic Street
Stamford, CT 06902-6896
<PAGE>
PIMCO Funds Prospectus
Multi-Manager Series
November 1, 2000
Share Classes
Ins Institutional
Adm Administrative
ACTIVELY MANAGED PORTFOLIOS OF SELECT PIMCO FUNDS
PIMCO Funds Asset Allocation Series consist of three actively managed mutual
funds that invest in a diversified portfolio of PIMCO Funds. In addition to
broad diversification, each Portfolio provides access to the extensive asset
allocatin and investment management capabilities of PIMCO Advisors L.P. and its
affiliates.
90/10 Portfolio
Seeks long-term capital appreciation. The Portfolio
normally invests approximately 90% of its assets in
PIMCO Stock Funds and 10% in PIMCO Bond Funds.
60/40 Portfolio
Seeks long-term capital appreciation and current
income. The Portfolio normally invests approximately
60% of its assets in PIMCO Stock Funds and 40% in PIMCO
Bond Funds.
30/70 Portfolio
Seeks current income, with long-term capital
appreciation as a secondary objective. The Portfolio
normally invests approximately 30% of its assets in
PIMCO Stock Funds and 70% in PIMCO Bond Funds.
This cover is not part of the Prospectus. [LOGO OF PIMCO FUNDS]
<PAGE>
PIMCO Funds Prospectus
This Prospectus describes three actively managed mutual fund
PIMCO Portfolios offered by PIMCO Funds: Multi-Manager Series (the
Funds: "Trust").
Multi-
Manager
Series
Asset Allocation Series -- 90/10 Portfolio
Asset Allocation Series -- 60/40 Portfolio
November Asset Allocation Series -- 30/70 Portfolio
1, 2000
Each Portfolio invests in a diversified portfolio of other PIMCO
Funds. This Prospectus explains what you should know about the
Portfolios before you invest. Please read it carefully.
Share
Classes
Institutional and
Administrative
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Portfolio Summaries
90/10 Portfolio................................................ 5
60/40 Portfolio................................................ 8
30/70 Portfolio................................................ 11
Summary of Principal Risks....................................... 14
Investment Objectives and Principal Investment Strategies........ 20
Underlying Funds................................................. 23
Other Risk Information........................................... 26
Management of the Portfolios..................................... 26
Investment Options - Institutional Class and Administrative Class
Shares ......................................................... 29
Purchases, Redemptions and Exchanges............................. 30
How Portfolio Shares Are Priced.................................. 33
Portfolio Distributions.......................................... 34
Tax Consequences................................................. 34
Financial Highlights............................................. 37
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The Portfolios are intended for investors who prefer to have their
asset allocation decisions made by professional money managers.
Each Portfolio has a distinct investment objective which it seeks
to achieve by investing within specified equity and fixed income
targets and ranges among certain Funds in the PIMCO Funds family.
The Portfolios invest only in Funds in the PIMCO Funds family. The
PIMCO Funds in which the Portfolios invest are called Underlying
Funds or Funds in this Prospectus.
Some of the Underlying Funds invest primarily in equity
securities and are called Underlying Stock Funds. Other Underlying
Funds invest primarily in fixed income securities, including money
market instruments, and are called Underlying Bond Funds. The
Portfolios are named according to their equity/fixed income
allocation targets. For instance, the 90/10 Portfolio will
normally invest approximately 90% of its assets in Underlying
Stock Funds and 10% of its assets in Underlying Bond Funds.
The table below lists the investment objectives and compares the
asset allocation strategies of the Portfolios. Other important
characteristics are described in the individual Portfolio
Summaries beginning on page 5, and are discussed in greater detail
under "Investment Objectives and Principal Investment Strategies."
A "Summary of Principal Risks" begins on page 14.
<TABLE>
<CAPTION>
PIMCO Funds
Asset Allocation Series Investment Objective Allocation Strategy
----------------------------------------------------------------------
<C> <C> <S>
90/10 Portfolio Long-term capital Under normal conditions,
appreciation approximately 90% (range
of 80%-100%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 10% (range of 0%-
20%) among Underlying
Bond Funds
----------------------------------------------------------------------
60/40 Portfolio Long-term capital Under normal conditions,
appreciation and approximately 60% (range
current income of 50%-70%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 40% (range of 30%-
50%) among Underlying
Bond Funds
----------------------------------------------------------------------
30/70 Portfolio Current income, with Under normal conditions,
long-term approximately 30% (range
capital appreciation as of 25%-35%) of the
a Portfolio's assets will
secondary objective be allocated among
Underlying Stock Funds
and 70% (range of 65%-
75%) among Underlying
Bond Funds
</TABLE>
Risk/Return An investor should choose among the Portfolios based on personal
Comparison investment objectives, investment time horizon, tolerance for risk
and personal financial circumstances. Generally speaking,
historical data suggests that the longer the time horizon, the
greater the likelihood that the total return of a portfolio that
invests primarily in equity securities will be higher than the
total return of a portfolio that invests primarily in fixed income
securities. However, an equity portfolio is generally subject to
higher levels of overall risk and price volatility than a fixed
income portfolio and is considered to be a more aggressive
investment. Based on these assumptions, the following chart gives
some indication of the comparative risk/return potential of the
Portfolios according to their equity/fixed income allocation
targets and ranges. Note that these assumptions may not be correct
in future market conditions and the chart may not accurately
predict the actual comparative risk/return of the Portfolios under
all market conditions.
90/10 Portfolio might be suitable for investors that have a
relatively long time horizon, seek long-term capital
appreciation potential and have a fairly high tolerance for
risk and volatility.
60/40 Portfolio might be suitable for investors that have a
medium-range time horizon, seek a balance of long-term
capital appreciation potential and income and have medium
tolerance for risk and volatility.
30/70 Portfolio might be suitable for investors that have a
shorter time horizon, seek a higher level of income combined
with some potential for long-term capital appreciation and
have a lower tolerance for risk and volatility.
It is possible to lose money on investments in the Portfolios.
While each Portfolio provides a relatively high level of
diversification in comparison to most mutual funds, a single
Portfolio may not be suitable as a complete investment program.
The fact that a Portfolio may have had good performance in the
past (for example, during the year ended 1999) is no assurance
that the value of the Fund's investments will not decline in the
future or will appreciate at a slower rate. An investment in a
Portfolio is not a deposit of a bank and is not guaranteed or
insured by the Federal Deposit Insurance Corporation or any other
government agency.
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
Asset PIMCO Advisors L.P. serves as the investment adviser to the
Allocation Portfolios. PIMCO Advisors selects the Underlying Funds in which
Strategies the Portfolios may invest. PIMCO Advisors' Asset Allocation
Committee determines how each Portfolio allocates and reallocates
its assets among the Underlying Funds selected by PIMCO Advisors
according to the Portfolio's equity/fixed income allocation
targets and ranges. The Committee attempts to diversify each
Portfolio's assets broadly among the major asset classes and sub-
classes represented by the Underlying Funds.
The major equity asset classes and sub-classes held by the
Underlying Stock Funds include those categorized by investment
style/category (growth, blend, value, enhanced index, sector-
related), region (U.S. equities, international developed markets,
international emerging markets), and market capitalization (large-
cap, mid-cap and small-cap). The major fixed income asset classes
and sub-classes held by the Underlying Bond Funds include those
categorized by sector/investment specialty (government securities,
mortgage-related securities, corporate bonds and inflation-indexed
bonds), region (U.S. fixed income, developed foreign fixed income,
emerging markets fixed income), credit quality (investment
grade/money market, medium grade, high yield), and duration (long-
term, intermediate-term and short-term).
Please see "Underlying Funds" in this Prospectus for a
description of the Underlying Funds as categorized by their
investment styles and main investments.
The Portfolios may invest in any or all of the Underlying Funds,
but will not normally invest in every Underlying Fund at any
particular time. Each Portfolio may invest in shares of the same
Underlying Funds; however, the percentage of each Portfolio's
assets so invested will vary depending on the Portfolio's
investment objective. The Asset Allocation Committee does not
allocate a Portfolio's assets according to a predetermined blend
of particular Underlying Funds. Instead, the Committee meets
regularly to determine the mix of Underlying Funds appropriate for
each Portfolio by allocating among the asset classes and sub-
classes held by the Underlying Funds. When making these decisions,
the Committee considers various quantitative and qualitative data
relating to the U.S. and foreign economies and securities markets.
This data includes projected growth trends in the U.S. and foreign
economies, forecasts for interest rates and the relationship
between short- and long-term interest rates (yield curve), current
and projected trends in inflation, relative valuation levels in
the equity and fixed income markets and various segments within
those markets, the outlook and projected growth of various
industrial sectors, information relating to business cycles,
borrowing trends and the cost of capital, political trends, data
relating to trade balances and labor information. The Committee
may also consider proprietary research provided by the investment
advisers and sub-advisers of the Underlying Funds.
The Committee then allocates each Portfolio's assets among the
Underlying Funds selected by PIMCO Advisors to fill out the asset
class and sub-class weightings it has identified according to the
Portfolio's equity/fixed income targets and ranges. The Committee
has the flexibility to reallocate each Portfolio's assets in
varying percentages among any or all of the Underlying Funds
selected by PIMCO Advisors based on the Committee's ongoing
analyses of the equity and fixed income markets, although these
tactical shifts are not expected to be large or frequent in
nature.
"Fund of The term "fund of funds" is used to describe mutual funds, such as
Funds" the Portfolios, that pursue their investment objectives by
Structure investing in other mutual funds. The cost of investing in a
and Portfolio will generally be higher than the cost of investing in a
Expenses mutual fund that invests directly in individual stocks and bonds.
By investing in a Portfolio, an investor will indirectly bear fees
and expenses charged by the Underlying Funds in which the
Portfolio invests in addition to the Portfolio's direct fees and
expenses. In addition, the use of a fund of funds structure could
affect the timing, amount and character of distibutions to
shareholders and therefore may increase the amount of taxes
payable by shareholders.
Portfolio
Descriptions
and Fees
The following Portfolio Summaries identify each Portfolio's
investment objective, principal investments and strategies,
principal risks, performance information and fees and expenses. A
more detailed "Summary of Principal Risks" describing principal
risks of investing in the Portfolios begins after the Portfolio
Summaries. A fuller discussion of the Portfolios' investment
strategies and related information is included under "Investment
Objectives and Principal Investment Strategies" in this
Prospectus.
Prospectus 4
<PAGE>
90/10 Portfolio
--------------------------------------------------------------------------------
Principal Investment Allocation
Investments Objective Strategy Target Range
and Seeks long-term
Strategies capital Underlying Stock
appreciation Funds 90% 80%-100%
Dividend Underlying Bond
Frequency Funds 10% 0%-20%
At least
annually
The Portfolio seeks to achieve its investment objective by
normally investing approximately 90% (within a range of 80%--100%)
of its assets in Underlying Stock Funds and approximately 10%
(within a range of0%--20%) of its assets in Underlying Bond Funds.
The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers. Please see "Asset Allocation Strategies" on page
3 for a summary of how the Asset Allocation Committee allocates
and reallocates the Portfolio's assets among particular Underlying
Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a relatively
long time horizon who seeks long-term capital appreciation
potential and has a fairly high tolerance for risk and volatility.
--------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions and/or PIMCO Advisors' selection of Underlying Funds
will not produce the desired results, and therefore the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, an investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Derivatives Risk .Interest Rate Risk
.Issuer Risk .Foreign Investment .Credit Risk
.Value Securities Risk .High Yield Risk
Risk .Emerging Markets .Mortgage Risk
.Growth Securities Risk .Management Risk
Risk .Currency Risk
.Smaller Company .Focused Investment
Risk Risk
.Liquidity Risk .Leveraging Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
90/10 Portfolio (continued)
--------------------------------------------------------------------------------
Performance The following shows summary performance information for the
Information Portfolio in a bar chart and an Average Annual Total Returns
table. The information provides some indication of the risks of
investing in the Portfolio by showing changes in its performance
from year to year and by showing how the Portfolio's average
annual returns compare with the returns of broad-based securities
market indices and an index of mutual funds. The bar chart, the
information to its right and the Average Annual Total Returns
table show performance of the Portfolio's Class A shares, which
are offered in a different prospectus. This is because the
Portfolio has not offered Institutional Class or Administrative
Class shares for a full calendar year. Although Class A,
Institutional Class and Administrative Class shares would have
similar returns (because all the Portfolio's shares represent
interests in the same portfolio of securities), Class A
performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and/or expenses paid by Class A shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class A shares in the Average Annual Total Returns table
reflect the impact of sales charges. For periods prior to the
inception of Institutional Class and Administrative Class shares
(2/26/99), the Average Annual Total Returns table also shows
estimated historical performance for those classes based on the
performance of the Portfolio's Class A shares. The Class A
performance has been adjusted to reflect that there are no sales
charges and lower distribution and/or service (12b-1) fees (if
any), administrative fees and other expenses paid by Institutional
Class and Administrative Class shares. Past performance is no
guarantee of future results.
Calendar Year Total Returns -- Class A
<TABLE>
<S> <C>
More Recent Return
Information
1/1/00-9/30/00 4.52%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99)
14.32%
--------------------
Lowest (3rd Qtr.
'99)
-3.86%
</TABLE>
[GRAPH]
'99 19.00%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (9/30/98)(/4/)
---------------------------------------------------------------------
Class A 12.50% 22.17%
---------------------------------------------------------------------
Institutional Class 19.80% 28.62%
---------------------------------------------------------------------
Administrative Class 19.54% 28.33%
---------------------------------------------------------------------
Russell 3000 Index(/1/) 20.89% 35.92%
---------------------------------------------------------------------
Lipper Multi-Cap Core Funds Average(/2/) 20.63% 35.90%
---------------------------------------------------------------------
Blended Index(/3/) 20.54% 33.44%
---------------------------------------------------------------------
</TABLE>
(1) The Russell 3000 Index is an unmanaged index of the 3,000
largest U.S. companies based on total market capitalization.
It is not possible to invest directly in the index.
(2) The Lipper Multi-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges, without concentrating in any one
market capitalization range over an extended period of time.
It does not take into account sales charges.
(3) The Blended Index represents the blended performance of a
hypothetical index developed by PIMCO Advisors made up of 72%
Russell 3000 Index, 18% MSCI All Country World ex-U.S. Index
and 10% Lehman Brothers Aggregate Bond Index. The Russell
3000 Index is described above. The MSCI All Country World ex-
U.S. Index is an unmanaged index of stocks representing both
developed and emerging markets but excluding the United
States. The Lehman Brothers Aggregate Bond Index is an
unmanaged index of investment grade, U.S. dollar-denominated
fixed income securities of domestic issuers having a maturity
greater than one year. It is not possible to invest directly
in these indices.
(4) The Fund began operations on 9/30/98. Index comparisons begin
on 9/30/98.
Prospectus 6
<PAGE>
90/10 Portfolio (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Portfolio:
Portfolio
Shareholder Fees (fees paid directly from your investment)
None
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees Fees(/1/) Fund Expenses(/2/) Expenses(/1/)
------------------------------------------------------------------------------------------
Institutional None None 0.15% 0.78% 0.93%
------------------------------------------------------------------------------------------
Administrative None 0.25% 0.15 0.78 1.18
------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrative Fees for the Portfolio do not reflect a
voluntary fee waiver of 0.05% currently in effect. While the
fee waiver is in effect, actual Administrative Fees will be
0.10%, and Total Annual Portfolio Operating Expenses are
estimated to be as follows: Institutional Class - 0.88%;
Administrative Class - 1.13%.
(2) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Institutional Class or Administrative Class shares
of the Portfolio with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
Institutional $ 95 $296 $515 $1,143
-----------------------------------------------------------------------------------
Administrative 120 375 649 1,432
-----------------------------------------------------------------------------------
</TABLE>
Taking into account the Administrative Fees waiver described in
footnote (1) above, the Examples for Years 1, 3, 5 and 10,
respectively, are as follows: Institutional Class -- $90, $280,
$487 and $1,103; Administrative Class -- $115, $359, $621 and
$1,392.
7 PIMCO Funds: Multi-Manager Series
<PAGE>
60/40 Portfolio
--------------------------------------------------------------------------------
Principal Investment Allocation Target Range
Investments Objective Strategy
and Underlying Stock
Strategies Seeks long-term Funds 60% 50%-70%
capital Underlying Bond
appreciation and Funds 40% 30%-50%
current income
Dividend
Frequency
Quarterly
The Portfolio seeks to achieve its investment objective by
normally investing approximately 60% (within a range of 50%--70%)
of its assets in Underlying Stock Funds and approximately 40%
(within a range of 30%--50%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers. Please see "Asset Allocation Strategies" on page
3 for a summary of how the Asset Allocation Committee allocates
and reallocates the Portfolio's assets among particular Underlying
Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a medium-range
time horizon who seeks a balance of long-term capital appreciation
potential and income and has a medium tolerance for risk and
volatility.
--------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions and/or PIMCO Advisors' selection of Underlying Funds
will not produce the desired results, and therefore the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, an investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Credit Risk .Emerging Markets
.Issuer Risk .High Yield Risk Risk
.Value Securities .Mortgage Risk .Currency Risk
Risk .Liquidity Risk .Focused Investment
.Growth Securities .Derivatives Risk Risk
Risk .Foreign Investment .Leveraging Risk
.Smaller Company Risk .Management Risk
Risk
.Interest Rate Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
Prospectus 8
<PAGE>
60/40 Portfolio (continued)
--------------------------------------------------------------------------------
Performance The following shows summary performance information for the
Information Portfolio in a bar chart and an Average Annual Total Returns
table. The information provides some indication of the risks of
investing in the Portfolio by showing changes in its performance
from year to year and by showing how the Portfolio's average
annual returns compare with the returns of broad-based securities
market indices and an index of mutual funds. The bar chart, the
information to its right and the Average Annual Total Returns
table show performance of the Portfolio's Class A shares, which
are offered in a different prospectus. This is because the
Portfolio has not offered Institutional Class or Administrative
Class shares for a full calendar year. Although Class A,
Institutional Class and Administrative Class shares would have
similar returns (because all the Portfolio's shares represent
interests in the same portfolio of securities), Class A
performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and/or expenses paid by Class A shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class A shares in the Average Annual Total Returns table
reflect the impact of sales charges. For periods prior to the
inception of Institutional Class and Administrative Class shares
(2/26/99), the Average Annual Total Returns table also shows
estimated historical performance for those classes based on the
performance of the Portfolio's Class A shares. The Class A
performance has been adjusted to reflect that there are no sales
charges and lower distribution and/or service (12b-1) fees (if
any), administrative fees and other expenses paid by Institutional
Class and Administrative Class shares. Past performance is no
guarantee of future results.
Calendar Year Total Returns -- Class A
<TABLE>
<S> <C>
More Recent Return
Information
1/1/00-9/30/00 5.18%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99)
9.40%
--------------------
Lowest (3rd Qtr.
'99)
-2.40%
</TABLE>
[GRAPH]
'99 12.03%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (9/30/98)(/5/)
--------------------------------------------------------------------
Class A 5.87% 13.02%
--------------------------------------------------------------------
Institutional Class 12.71% 18.92%
--------------------------------------------------------------------
Administrative Class 12.43% 18.62%
--------------------------------------------------------------------
Russell 3000 Index(/1/) 20.89% 35.92%
--------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(/3/) -0.82% -0.39%
--------------------------------------------------------------------
Lipper Balanced Fund Average(/3/) 8.79% 16.57%
--------------------------------------------------------------------
Blended Index(/4/) 13.12% 21.30%
--------------------------------------------------------------------
</TABLE>
(1) The Russell 3000 Index is an unmanaged index of the 3,000
largest U.S. companies based on total market capitalization.
It is not possible to invest directly in the index.
(2) The Lehman Brothers Aggregate Bond Index is an unmanaged
index of investment grade, U.S. dollar-denominated fixed
income securities of domestic issuers having a maturity
greater than one year. It is not possible to invest directly
in the index.
(3) The Lipper Balanced Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. whose primary objective is to conserve
principal by maintaining at all times a balanced portfolio of
both stocks and bonds. It does not take into account sales
charges.
(4) The Blended Index represents the blended performance of a
hypothetical index developed by PIMCO Advisors made up of 48%
Russell 3000 Index, 12% MSCI All Country World ex-U.S. Index
and 40% Lehman Brothers Aggregate Bond Index. The Russell
3000 Index and Lehman Brothers Aggregate Bond Index are
described above. The MSCI All Country World ex-U.S. Index is
an unmanaged index of stocks representing both developed and
emerging markets but excluding the United States. It is not
possible to invest directly in these indices.
(5) The Fund began operations on 9/30/98. Index comparisons begin
on 9/30/98.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
60/40 Portfolio (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Portfolio:
Portfolio
Shareholder Fees (fees paid directly from your investment)
None
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees Fees(/1/) Fund Expenses(/2/) Expenses(/1/)
------------------------------------------------------------------------------------------
Institutional None None 0.15% 0.67% 0.82%
------------------------------------------------------------------------------------------
Administrative None 0.25% 0.15 0.67 1.07
------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrative Fees for the Portfolio do not reflect a
voluntary fee waiver of 0.05% currently in effect. While the
fee waiver is in effect, actual Administrative Fees will be
0.10%, and Total Annual Portfolio Operating Expenses are
estimated to be as follows: Institutional Class - 0.77%;
Administrative Class - 1.02%.
(2) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated
based upon a recent allocation of the Portfolio's assets
among Underlying Funds and upon the total annual operating
expenses of Institutional Class shares of these Underlying
Funds. For a listing of the expenses associated with each
Underlying Fund, please see "Management of the Portfolios--
Underlying Fund Expenses." Total Annual Portfolio Operating
Expenses and the Examples set forth below are based on
estimates of the Underlying Fund Expenses the Portfolio will
incur. Actual Underlying Fund Expenses for the Portfolio are
expected to vary with changes in the allocation of the
Portfolio's assets, and may be higher or lower than those
shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Institutional Class or Administrative Class shares
of the Portfolio with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
Institutional $ 84 $262 $455 $1,014
-----------------------------------------------------------------------------------
Administrative 109 340 590 1,306
-----------------------------------------------------------------------------------
</TABLE>
Taking into account the Administrative Fees waiver described in
footnote (1) above, the Examples for Years 1, 3, 5 and 10,
respectively, are as follows: Institutional Class -- $79, $246,
$427 and $973; Administrative Class -- $104, $324, $563 and
$1,265.
Prospectus 10
<PAGE>
30/70 Portfolio
--------------------------------------------------------------------------------
Principal Investment Allocation Target Range
Investments Objective Strategy 30% 25%--35%
and Seeks current Underlying 70% 65%--75%
Strategies income, with Stock Funds
long-term Underlying
capital Bond Funds
appreciation as
a secondary
objective
Dividend
Frequency
Monthly
The Portfolio seeks to achieve its investment objective by
normally investing approximately 30% (within a range of 25%--35%)
of its assets in Underlying Stock Funds and approximately 70%
(within a range of 65%--75%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers. Please see "Asset Allocation Strategies" on page
3 for a summary of how the Asset Allocation Committee allocates
and reallocates the Portfolio's assets among particular Underlying
Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a shorter time
horizon who seeks a higher level of income combined with some
potential for long-term capital appreciation and has a lower
tolerance for risk and volatility.
--------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions and/or PIMCO Advisors' selection of Underlying Funds
will not produce the desired results, and therefore the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, an investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
. Interest Rate . Value Securities . Emerging Markets
Risk Risk Risk
. Credit Risk . Growth Securities . Currency Risk
. High Yield Risk Risk . Focused
. Mortgage Risk . Smaller Company Investment Risk
. Market Risk Risk . Leveraging Risk
. Issuer Risk . Liquidity Risk . Management Risk
. Derivatives Risk
. Foreign
Investment Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
30/70 Portfolio (continued)
--------------------------------------------------------------------------------
Performance The following shows summary performance information for the
Information Portfolio in a bar chart and an Average Annual Total Returns
table. The information provides some indication of the risks of
investing in the Portfolio by showing changes in its performance
from year to year and by showing how the Portfolio's average
annual returns compare with the returns of broad-based securities
market indices and an index of mutual funds. The bar chart, the
information to its right and the Average Annual Total Returns
table show performance of the Portfolio's Class A shares, which
are offered in a different prospectus. This is because the
Portfolio has not offered Institutional Class or Administrative
Class shares for a full calendar year. Although Class A,
Institutional Class and Administrative Class shares would have
similar returns (because all the Portfolio's shares represent
interests in the same portfolio of securities), Class A
performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and/or expenses paid by Class A shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class A shares in the Average Annual Total Returns table
reflect the impact of sales charges. For periods prior to the
inception of Institutional Class and Administrative Class shares
(2/26/99), the Average Annual Total Returns table also shows
estimated historical performance for those classes based on the
performance of the Portfolio's Class A shares. The Class A
performance has been adjusted to reflect that there are no sales
charges and lower distribution and/or service (12b-1) fees (if
any), administrative fees and other expenses paid by Institutional
Class and Administrative Class shares. Past performance is no
guarantee of future results.
Calendar Year Total Returns -- Class A
<TABLE>
<S> <C>
More Recent Return
Information
1/1/00-9/30/00 5.78%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99)
4.74%
--------------------
Lowest (1st Qtr.
'99)
-1.43%
</TABLE>
[GRAPH]
'99 4.64%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (9/30/98)(/4/)
-------------------------------------------------------------------
Class A -0.07% 4.73%
-------------------------------------------------------------------
Institutional Class 5.18% 9.22%
-------------------------------------------------------------------
Administrative Class 4.92% 8.94%
-------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(/1/) -0.82% -0.39%
-------------------------------------------------------------------
Lipper General Bond Fund Average(/2/) 1.17% 2.88%
-------------------------------------------------------------------
Blended Index(/3/) 6.00% 10.04%
-------------------------------------------------------------------
</TABLE>
(1) The Lehman Brothers Aggregate Bond Index is an unmanaged index
of investment grade, U.S. dollar-denominated fixed income
securities of domestic issuers having a maturity greater than
one year. It is not possible to invest directly in the index.
(2) The Lipper General Bond Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that intend to keep most of their assets in
corporate and government debt issues and do not have any
quality or maturity restrictions. It does not take into
account sales charges.
(3) The Blended Index represents the blended performance of a
hypothetical index developed by PIMCO Advisors made up of 24%
Russell 3000 Index, 6% MSCI All Country World ex-U.S. Index
and 70% Lehman Brothers Aggregate Bond Index. The Russell 3000
Index is an unmanaged index of the 3,000 largest U.S.
companies based on total market capitalization. The MSCI All
Country World ex-U.S. Index is an unmanaged index of stocks
representing both developed and emerging markets but excluding
the United States. The Lehman Brothers Aggregate Bond Index is
described above. It is not possible to invest directly in
these indices.
(4) The Fund began operations on 9/30/98. Index comparisons begin
on 9/30/98.
Prospectus 12
<PAGE>
30/70 Portfolio (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Portfolio:
Portfolio
Shareholder Fees (fees paid directly from your investment)
None
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees Fees(/1/) Fund Expenses(/2/) Expenses(/1/)
------------------------------------------------------------------------------------------
Institutional None None 0.15% 0.56% 0.71%
------------------------------------------------------------------------------------------
Administrative None 0.25% 0.15 0.56 0.96
------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrative Fees for the Portfolio do not reflect a
voluntary fee waiver of 0.05% currently in effect. While the
fee waiver is in effect, actual Administrative Fees will be
0.10%, and Total Annual Portfolio Operating Expenses are
estimated to be as follows: Institutional Class - 0.66%;
Administrative Class - 0.91%.
(2) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated
based upon a recent allocation of the Portfolio's assets
among Underlying Funds and upon the total annual operating
expenses of Institutional Class shares of these Underlying
Funds. For a listing of the expenses associated with each
Underlying Fund, please see "Management of the Portfolios--
Underlying Fund Expenses." Total Annual Portfolio Operating
Expenses and the Examples set forth below are based on
estimates of the Underlying Fund Expenses the Portfolio will
incur. Actual Underlying Fund Expenses for the Portfolio are
expected to vary with changes in the allocation of the
Portfolio's assets, and may be higher or lower than those
shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Institutional Class or Administrative Class shares
of the Portfolio with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
Institutional $73 $227 $395 $ 883
-----------------------------------------------------------------------------------
Administrative 98 306 531 1,178
-----------------------------------------------------------------------------------
</TABLE>
Taking into account the Administrative Fees waiver described in
footnote (1) above, the Examples for Years 1, 3, 5 and 10,
respectively, are as follows: Institutional Class -- $67, $211,
$367 and $842; Administrative Class -- $93, $290, $503 and $1,138.
13 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary of Principal Risks
The value of an investment in a Portfolio changes with the values
of that Portfolio's investments in the Underlying Funds. Many
factors can affect those values. The factors that are most likely
to have a material effect on a particular Portfolio's investments
as a whole are called "principal risks." The principal risks of
each Portfolio are identified in the Portfolio Summaries beginning
on page 5 and are summarized in this section. There is no
guarantee that a Portfolio will be able to achieve its investment
objective.
Allocation Risk
Each Portfolio's investment performance depends upon how its
assets are allocated and reallocated among particular Underlying
Funds according to the Portfolio's equity/fixed income allocation
targets and ranges. A principal risk of investing in each
Portfolio is that PIMCO Advisors' Asset Allocation Committee will
make less than optimal or poor asset allocation decisions and/or
that PIMCO Advisors will make less than optimal decisions in
selecting the Underlying Funds in which the Portfolios invest. The
Committee attempts to identify asset classes and sub-classes
represented by the Underlying Funds that will provide consistent,
quality performance for the Portfolios, but there is no guarantee
that the Committee's allocation techniques will produce the
desired results. It is possible that the Committee and/or PIMCO
Advisors will focus on Underlying Funds that perform poorly or
underperform other available Funds under various market
conditions. You could lose money on your investment in a Portfolio
as a result of these allocation decisions.
Underlying Fund Risks
Because each Portfolio invests all of its assets in Underlying
Funds, the risks associated with investing in the Portfolios are
closely related to the risks associated with the securities and
other investments held by the Underlying Funds. The ability of a
Portfolio to achieve its investment objective will depend upon the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved.
Each Portfolio's net asset value will fluctuate in response to
changes in the net asset values of the Underlying Funds in which
it invests. The extent to which the investment performance and
risks associated with a particular Portfolio correlate to those of
a particular Underlying Fund will depend upon the extent to which
the Portfolio's assets are allocated from time to time for
investment in the Underlying Fund, which will vary. A Portfolio's
investment in a particular Underlying Fund may and in some cases
is expected to exceed 25% of its assets. To the extent that a
Portfolio invests a significant portion of its assets in an
Underlying Fund, it will be particularly sensitive to the risks
associated with that Fund.
The following summarizes principal risks associated with
investments in the Underlying Funds and, indirectly, with your
investment in a Portfolio. Each Underlying Fund may be subject to
additional principal risks other than those described below
because the types of investments made by an Underlying Fund can
change over time. The summary is not intended to be exhaustive.
For a more complete description of these risks and the securities
and investment techniques used by the Underlying Funds, please
refer to the Statement of Additional Information and the
Underlying Fund prospectuses, which are incorporated herein by
reference and are available free of charge by telephoning the
Trust at 1-800-927-4648.
Market The market price of securities owned by an Underlying Fund may go
Risk up or down, sometimes rapidly or unpredictably. Securities may
decline in value due to factors affecting securities markets
generally or particular industries represented in the securities
markets. The value of a security may decline due to general market
conditions which are not specifically related to a particular
company, such as real or perceived adverse economic conditions,
changes in the general outlook for corporate earnings, changes in
interest or currency rates, or adverse investor sentiment
generally. They may also decline due to factors which affect a
particular industry or industries, such as labor shortages or
increased production costs and competitive conditions within an
industry. Equity securities generally have greater price
volatility than fixed income securities and the Underlying Stock
Funds are particularly sensitive to these market risks.
Issuer
Risk
The value of a security may also decline for a number of reasons
which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
Prospectus 14
<PAGE>
Value Each Underlying Stock Fund may invest in companies that may not be
Securities expected to experience significant earnings growth, but whose
Risk securities the Fund's portfolio manager believes are selling at a
price lower than their true value. PIMCO Equity Income,
Renaissance, Value, Small-Cap Value, Capital Appreciation, Mid-Cap
and Micro-Cap Funds and PIMCO Allianz Select International Fund
place particular emphasis on value securities. Companies that
issue value securities may have experienced adverse business
developments or may be subject to special risks that have caused
their securities to be out of favor. If a portfolio manager's
assessment of a company's prospects is wrong, or if the market
does not recognize the value of the company, the price of its
securities may decline or may not approach the value that the
portfolio manager anticipates.
Growth Each Underlying Stock Fund may invest in equity securities of
Securities companies that its portfolio manager believes will experience
Risk relatively rapid earnings growth. PIMCO Growth, Target,
Opportunity, Capital Appreciation, Mid-Cap, Micro-Cap and
Innovation Funds and PIMCO Allianz Select International Fund place
particular emphasis on growth securities. Growth securities
typically trade at higher multiples of current earnings than other
securities. Therefore, the values of growth securities may be more
sensitive to changes in current or expected earnings than the
values of other securities.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk market capitalizations that are small compared to other publicly
traded companies. These companies may have limited product lines,
markets or financial resources or they may depend on a few key
employees. Securities of smaller companies may trade less
frequently and in lesser volume than more widely held securities
and their values may fluctuate more sharply than other securities.
They may also trade in the over-the-counter market or on a
regional exchange, or may otherwise have limited liquidity. PIMCO
Opportunity, Micro-Cap, Small-Cap Value and Innovation Funds
generally have substantial exposure to this risk. PIMCO Target and
Mid-Cap Funds and PIMCO Allianz Select International Fund also
have significant exposure to this risk because they invest
substantial assets in companies with medium-sized market
capitalizations, which are smaller and generally less-seasoned
than the largest companies. Smaller company risk also applies to
fixed income securities issued by smaller companies and may affect
certain investments of the Underlying Bond Funds.
Liquidity
Risk Many of the Underlying Funds are subject to liquidity risk.
Liquidity risk exists when particular investments are difficult to
purchase or sell, possibly preventing a Fund from selling out of
these illiquid securities at an advantageous time or price.
Underlying Funds with principal investment strategies that involve
securities of companies with smaller market capitalizations,
foreign securities, derivatives or securities with substantial
market and/or credit risk tend to have the greatest exposure to
liquidity risk.
Derivatives Many of the Underlying Funds may, but are not required to, use a
Risk number of derivative instruments for risk management purposes or
as part of their investment strategies. Generally, derivatives are
financial contracts whose value depends upon, or is derived from,
the value of an underlying asset, reference rate or index, and may
relate to stocks, bonds, interest rates, currencies or currency
exchange rates, commodities, and related indexes. Examples of
derivative instruments include options contracts, futures
contracts, options on futures contracts and swap agreements. An
Underlying Fund's use of derivative instruments involves risks
different from, or possibly greater than, the risks associated
with investing directly in securities and other traditional
investments. Also, an Underlying Fund's portfolio manager may
decide not to employ any of these strategies and there is no
assurance that any derivatives strategy used by a Fund will
succeed.
A description of the various derivative instruments in which the
Underlying Funds may invest and the risks associated with each
instrument is included in the Underlying Fund prospectuses and in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Underlying Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
Liquidity Risk Liquidity risk exists when a particular
derivative instrument is difficult to purchase or sell. If a
derivative transaction is particularly large or if the relevant
market is illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When an Underlying Fund uses
derivatives for leverage, investments in that Fund will tend to be
more volatile, resulting in larger gains or losses in response to
market changes. To limit leveraging risk, the Underlying Funds
observe asset segregation requirements to cover their obligations
under derivative instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that an
Underlying Fund will engage in derivatives transactions at any
time or from time to time. A Fund's ability to use derivatives may
also be limited by certain regulatory considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the general risk that the market value
of the instrument will change in a way detrimental to an
Underlying Fund's interest. If a portfolio manager incorrectly
forecasts the values of securities, currencies or interest rates
or other economic factors in using derivatives for an Underlying
Fund, the Fund might have been in a better position if it had not
entered into the transaction at all. While some strategies
involving derivative instruments can reduce the risk of loss, they
can also reduce the opportunity for gain or even result in losses
by offsetting favorable price movements in other investments of an
Underlying Fund. An Underlying Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to an Underlying Fund. Also, the
value of derivatives may not correlate perfectly, or at all, with
the value of the assets, reference rates or indexes they are
designed to closely track. In addition, an Underlying Fund's use
of derivatives may also cause the Fund to realize higher amounts
of short-term capital gains (taxed at ordinary income tax rates
when distributed to shareholders who are individuals) than if the
Fund had not used such instruments.
Foreign Many Underlying Funds (in particular, PIMCO International,
(non- Structured Emerging Markets, Tax-Efficient Structured Emerging
U.S.) Markets, Global Bond, Foreign Bond and Emerging Markets Bond Funds
Investment and PIMCO Allianz Select International Fund) invest in securities
Risk of foreign issuers, securities traded principally in securities
markets outside the United States and/or securities denominated in
foreign currencies (together, "foreign securities"). These Funds
may experience more rapid and extreme changes in value than Funds
that invest exclusively in securities of U.S. issuers or
securities that trade exclusively in U.S. markets.
The securities markets of many foreign countries are relatively
small, with a limited number of companies representing a small
number of industries. Foreign securities often trade with less
frequency and volume than domestic securities and therefore may
exhibit greater price volatility. Additionally, issuers of foreign
securities are usually not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting and auditing
standards of foreign countries differ, in some cases
significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely
affect an Underlying Fund's investments in a foreign country. In
the event of nationalization, expropriation or other confiscation,
a Fund could lose its entire investment in foreign securities. To
the extent that an Underlying Fund invests a significant portion
of its assets in a narrowly defined geographic area such as
Eastern Europe, South Africa or Asia, the Fund will generally have
more exposure to regional economic risks associated with foreign
investments. Adverse conditions in certain regions (such as
Southeast Asia) can also adversely affect securities of other
countries whose economies appear to be unrelated. In addition,
special U.S. tax considerations may apply to an Underlying Fund's
investment in foreign securities.
Prospectus 16
<PAGE>
Certain Underlying Bond Funds may invest in sovereign debt
issued by governments, their agencies or instrumentalities, or
other government-related entities. Holders of sovereign debt may
be requested to participate in the rescheduling of such debt and
to extend further loans to governmental entities. In addition,
there is no bankruptcy proceeding by which defaulted sovereign
debt may be collected.
Emerging Certain Underlying Funds (in particular, PIMCO Structured Emerging
Markets Markets, Tax-Efficient Structured Emerging Markets and Emerging
Risk Markets Bond Funds) may invest in the securities of issuers based
in countries with developing or "emerging market" economies. These
securities may present market, credit, currency, liquidity, legal,
political and other risks different from, or greater than, the
risks of investing in developed foreign countries.
Currency Many Underlying Funds may invest directly in foreign currencies or
Risk in securities that trade in, or receive revenues in, foreign
currencies. To the extent that they do so, these Funds are subject
to the risk that those currencies will decline in value relative
to the U.S. dollar, or, in the case of hedging positions, that the
U.S. Dollar will decline in value relative to the currency being
hedged. PIMCO Global Bond, Foreign Bond, Emerging Markets Bond,
International, Structured Emerging Markets and Tax-Efficient
Structured Emerging Markets Funds and PIMCO Allianz Select
International Fund are particularly sensitive to currency risk.
Currency rates in foreign countries may fluctuate significantly
over short periods of time for a number of reasons, including
changes in interest rates, intervention (or the failure to
intervene) by U.S. or foreign governments, central banks or
supranational entities such as the International Monetary Fund, or
by the imposition of currency controls or other political
developments in the U.S. or abroad. For example, uncertainty
surrounds the introduction of the euro (a common currency unit for
the European Union) and its effect on the value of European
currencies as well as securities denominated in local European
currencies. These and other currencies in which Underlying Fund
assets are denominated may be devalued against the U.S. dollar,
resulting in a loss to such Funds.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies increases risk. PIMCO Global Bond, Foreign
Risk Bond and Emerging Markets Bond Funds are "non-diversified," which
means that they invest in a smaller number of issuers than
diversified mutual funds. Other Underlying Funds also normally
invest in a relatively small number of issuers. In addition, many
Underlying Bond Funds may invest a substantial portion of their
assets in the bonds of similar projects or from issuers in the
same state. To the extent that they focus their investments, the
Underlying Funds 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
Underlying Fund's net asset value. Some of those investments also
may present substantial credit or other risks. PIMCO
International, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets, Global Bond, Foreign Bond and
Emerging Markets Bond Funds and PIMCO Allianz Select International
Fund may be subject to increased risk to the extent they focus
their assets in securities denominated in a particular foreign
currency or in a narrowly defined geographic area outside the
U.S., because companies in these areas may share common
characteristics and are often subject to similar business risks
and regulatory burdens, and their securities may react similarly
to economic, market, political or other developments. Similarly,
PIMCO Innovation Fund is vulnerable to events affecting companies
which use innovative technologies to gain a strategic, competitive
advantage in their industry and companies that provide and service
those technologies because it normally concentrates its
investments in those companies. Also, the Underlying Funds may
from time to time have greater risk to the extent they invest a
substantial portion of their assets in companies in related
industries such as "technology" or "financial and business
services," which may share common characteristics, are often
subject to similar business risks and regulatory burdens, and
whose securities may react similarly to economic, market,
political or other developments.
Although each Portfolio normally invests in a number of different
Underlying Funds, to the extent that a Portfolio concentrates a
significant portion of its assets in a single Underlying Fund, it
will be particularly sensitive to the risks associated with that
Fund and any investments in which that Fund concentrates.
Leveraging Leverage, including borrowing, will cause the value of an
Risk Underlying Fund's shares to be more volatile that if the Fund did
not use leverage. This is because leverage tends to exaggerate the
effect of any increase or decrease in the value of a Fund's
portfolio securities. Certain Underlying 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. An Underlying Fund's use of derivatives
may also involve leverage. The use of leverage may also cause an
Underlying Fund to liquidate portfolio positions when it may not
be advantageous to do so in order to satisfy its obligations or to
meet segregation requirements.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
Interest All of the Underlying Funds that invest in fixed income
Rate Risk securities, and particularly the Underlying Bond Funds, are
subject to interest rate risk. Changes in the market values of
fixed income securities are largely a function of changes in the
current level of interest rates. The value of an Underlying Fund's
investments in fixed income securities will typically change as
the level of interest rates fluctuate. During periods of declining
interest rates, the value of fixed income securities generally
rise. Conversely, during periods of rising interest rates, the
value of fixed income securities generally decline.
"Duration" is one measure of the expected life of a fixed income
security that is used to determine the sensitivity of a security's
price to changes in interest rates. Securities with longer
durations tend to be more sensitive to changes in interest rates,
usually making them more volatile than securities with shorter
durations. Accordingly, Underlying Bond Funds with longer average
portfolio durations (e.g., PIMCO Long-Term U.S. Government Fund)
will generally be more sensitive to changes in interest rates than
Funds with shorter average portfolio durations (e.g., PIMCO Money
Market, Short-Term and Low Duration Funds). Also, some portfolios
(e.g., those with mortgage-backed and other prepayable securities)
have changing durations and may have increasing durations
precisely when that is least advantageous (i.e., when interest
rates are rising).
Many Underlying Funds, including most of the Underlying Bond
Funds, may invest in securities that are particularly sensitive to
fluctuations in prevailing interest rates and have relatively high
levels of interest rate risk. These include various mortgage-
related securities (for instance, the interest-only or "IO" class
of a stripped mortgage-backed security) and "zero coupon"
securities (fixed income securities, including certain U.S.
Government securities, that do not make periodic interest payments
and are purchased at a discount from their value at maturity).
Credit All of the Underlying Funds are subject to credit risk. This is
Risk the risk that the issuer or the guarantor of a fixed income
security, or the counterparty to a derivatives contract,
repurchase agreement or a loan of portfolio securities, will be
unable or unwilling to make timely principal and/or interest
payments, or to otherwise honor its obligations. Securities are
subject to varying degrees of credit risk, which are often
reflecting in credit ratings provided by rating agencies such as
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's
Ratings Services ("S&P").
The Underlying Funds that invest in fixed income securities
(particularly the Underlying Bond Funds) are subject to varying
degrees of risk that the issuers of the securities will have their
credit ratings downgraded or will default, potentially reducing
the Underlying Fund's share price and income level. Nearly all
fixed income securities are subject to some credit risk, whether
the issuers of the securities are corporations, states and local
governments or foreign governments. Even certain U.S. Government
securities are subject to credit risk.
High High yield securities (commonly known as "junk bonds") are fixed
Yield income securities rated lower than Baa by Moody's or BBB by S&P,
Risk or unrated securities determined to be of comparable quality.
Underlying Bond Funds which invest in high yield securities (in
particular, PIMCO High Yield and Emerging Markets Bond Funds) may
be subject to greater levels of interest rate, credit and
liquidity risk than Funds that invest exclusively in higher
quality fixed income securities (e.g., PIMCO Money Market and
Long-Term U.S. Government Funds). These securities are considered
predominately speculative with respect to the issuer's continuing
ability to make principal and interest payments (credit risk).
These securities may also be more susceptible to real or perceived
adverse economic and competitive industry conditions than higher
quality fixed income securities. An economic downturn or period of
rising interest rates could adversely affect the market for these
securities and reduce an Underlying Bond Fund's ability to sell
them (liquidity risk).
Mortgage Most of the Underlying Bond Funds may invest in mortgage-related
Risk securities. Rising interest rates tend to extend the duration of
mortgage-related securities, making them more sensitive to changes
in interest rates. As a result, in a period of rising interest
rates, an Underlying Fund that holds mortgage-related securities
may exhibit additional volatility. This is sometimes referred to
as extension risk. In addition, mortgage-related securities may
involve special risks relating to unanticipated rates of
prepayment on the mortgages underlying the securities. This is
sometimes referred to as prepayment risk. Declining interest rates
may tend to increase prepayments, and these prepayments would have
to be reinvested at the then-prevailing lower interest rates.
Therefore, an Underlying Fund that holds mortgage-related
securities may have less potential for capital appreciation during
periods of declining interest rates than Funds that invest in
other types of fixed income securities of similar maturities.
Prospectus 18
<PAGE>
Management Each Underlying Fund is subject to management risk because it is
Risk an actively managed investment portfolio. PIMCO Advisors, Pacific
Investment Management Company LLC ("Pacific Investment Management
Company"), and the sub-advisers and individual portfolio managers
of the Underlying Funds will apply investment techniques and risk
analyses in making investment decisions for the Funds, but there
can be no guarantee that they will produce the desired results.
A Note on
PIMCO Each Portfolio may invest in PIMCO StocksPLUS Fund. While the
StocksPLUS investment objective of that Fund is to achieve a total return
Fund which exceeds the total return performance of the S&P 500 Index,
it does so by investing substantially all of its assets in a
combination of equity-based (S&P 500 Index) derivative
instruments, backed by a portfolio of fixed income securities.
Consequently, the risks of investing in the Fund include
derivatives risk and the risks generally associated with the
Underlying Bond Funds. To the extent that the Fund invests in S&P
500 Index derivatives backed by a portfolio of fixed income
securities, under certain conditions, generally in a market where
the value of both S&P 500 Index derivatives and fixed income
securities are declining, the Fund may experience greater losses
than would be the case if it were to invest directly in a
portfolio of S&P 500 Index stocks.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
Investment Objectives and Principal Investment Strategies
The investment objective and principal investment strategies of
each Portfolio are described below. There can be no assurance that
the investment objective of any Portfolio will be achieved.
Because the market value of each Portfolio's investments will
change, the net asset value per share of each Portfolio will also
vary.
The Portfolios are intended for investors who prefer to have
their asset allocation decisions made by professional money
managers. Each Portfolio seeks to achieve its investment objective
by investing within specified equity and fixed income ranges among
the Underlying Funds. Each Underlying Fund is a series of the
Trust or PIMCO Funds: Pacific Investment Management Series and is
managed by PIMCO Advisors and/or its affiliates.
Portfolio 90/10 Portfolio seeks long-term capital appreciation. Under normal
Descriptionsconditions, approximately 90% of the Portfolio's assets will be
allocated among Underlying Stock Funds and 10% among Underlying
Bond Funds.
60/40 Portfolio seeks long-term capital appreciation and current
income. Under normal conditions, approximately 60% of the
Portfolio's assets will be allocated among Underlying Stock Funds
and 40% among Underlying Bond Funds.
30/70 Portfolio seeks current income. Long-term capital
appreciation is a secondary objective. Under normal conditions,
approximately 30% of the Portfolio's assets will be allocated
among Underlying Stock Funds and 70% among Underlying Bond Funds.
PIMCO Advisors serves as the investment adviser to the Portfolios
and selects the Underlying Funds in which the Portfolios may
invest. PIMCO Advisors' Asset Allocation Committee determines how
each Portfolio allocates and reallocates its assets among the
Underlying Funds selected by PIMCO Advisors according to the
Portfolio's equity/fixed income allocation targets and ranges.
Please see "Asset Allocation Strategies" in the Summary
Information section above for a description of the allocation
strategies and techniques used by the Committee. The table below
illustrates the equity and fixed income allocation targets and
typical ranges for each Portfolio under normal market conditions.
Equity and Fixed Income Targets and Ranges
(as a percentage of each Portfolio's total investments)
<TABLE>
<CAPTION>
Typical
PIMCO Funds Target Allocation
Asset Allocation Series Allocation Range
--------------------------------------------------------
<S> <C> <C>
90/10 Portfolio
Equity--Underlying Stock Funds 90% 80% - 100%
Fixed Income--Underlying Bond Funds* 10% 0% - 20%
--------------------------------------------------------
60/40 Portfolio
Equity--Underlying Stock Funds 60% 50% - 70%
Fixed Income--Underlying Bond Funds* 40% 30% - 50%
--------------------------------------------------------
30/70 Portfolio
Equity--Underlying Stock Funds 30% 25% - 35%
Fixed Income--Underlying Bond Funds* 70% 65% - 75%
</TABLE>
* The Fixed Income portion may include a money market component
through investments in PIMCO Money Market Fund.
Each Portfolio invests all of its assets in Underlying Funds and
may invest in any or all of the Funds. However, it is expected
that a Portfolio will invest in only some of the Underlying Funds
at any particular time. A Portfolio's investment in a particular
Underlying Fund may exceed 25% of the Portfolio's total assets. To
the extent that a Portfolio invests a significant portion of its
assets in an Underlying Fund, it will be particularly sensitive to
the risks associated with that Fund. The particular Underlying
Funds in which each Portfolio may invest, the equity and fixed
income allocation targets and ranges specified above, and the
percentage of each Portfolio's assets invested from time to time
in any Underlying Fund or combination of Funds may be changed from
time to time without the approval of the Portfolio's shareholders.
Each Portfolio is also subject to certain investment restrictions
that are described under "Investment Restrictions" in the
Statement of Additional Information.
Prospectus 20
<PAGE>
Equity The equity portion of each Portfolio will be allocated among a
Portion number of Underlying Stock Funds which represent a broad range of
of the equity-based asset classes and sub-classes and a variety of
Portfolios investment objectives and strategies. By allocating assets among
these Funds, the equity portions of the Portfolios can be
diversified in multiple ways, including the following:
By Investment Style/Category
.Growth
.Blend (Broad Market)
.Value
.Enhanced Index
.Sector-Related
By Region
.U.S. Equities
.International Developed Markets Equities
.International Emerging Markets Equities
By Size
.Large-Cap
.Mid-Cap
.Small-Cap
For a description of the Underlying Stock Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Fixed The fixed income portion of each Portfolio will be allocated among
Income a number of Underlying Bond Funds which represent a broad range of
Portion fixed income-based asset classes and sub-classes and a variety of
of the investment objectives and strategies. By allocating assets among
Portfolios these Funds, the fixed income portions of the Portfolios can be
diversified in multiple ways, including the following:
By Sector/Investment Specialty
.Governments
.Mortgages
.Corporate
.Inflation-Indexed
By Region
.U.S. Fixed Income
.Developed Foreign Fixed Income
.Emerging Markets Fixed Income
By Credit Quality
.Investment Grade/Money Market
.Medium Grade
.High Yield
By Duration
.Long-Term
.Intermediate-Term
.Short-Term
For a description of the Underlying Bond Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Temporary In response to unfavorable market and other conditions, each
Defensive Portfolio may invest up to 100% of its assets in PIMCO Money
Strategies Market Fund (and may deviate from its asset allocation range) for
temporary defensive purposes. A Portfolio may also borrow money
for temporary or emergency purposes. These temporary strategies
would be inconsistent with the Portfolio's investment objective
and principal investment strategies and may adversely affect the
Portfolio's ability to achieve its investment objective.
21 PIMCO Funds: Multi-Manager Series
<PAGE>
Portfolio A change in the securities held by a Portfolio is known as
Turnover "portfolio turnover." Because PIMCO Advisors does not expect to
reallocate the Portfolios' assets among the Underlying Funds on a
frequent basis, the portfolio turnover rates for the Portfolios
are expected to be modest (i.e., less than 25%) in comparison to
most mutual funds. However, the Portfolios' indirectly bear the
expenses associated with portfolio turnover of the Underlying
Funds, a number of which have fairly high portfolio turnover rates
(i.e., in excess of 100%). High portfolio turnover involves
correspondingly greater expenses to an Underlying Fund, including
brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other
securities. Shareholders in the Portfolios may also bear expenses
directly or indirectly through sales of securities held by the
Portfolios and the Underlying Funds which result in realization of
taxable capital gains. To the extent such gains relate to
securities held for twelve months or less, such gains will be
short-term capital gains taxed at ordinary income tax rates when
distributed to shareholders who are individuals. The trading costs
and tax effects associated with portfolio turnover may adversely
affect a Portfolio's performance and the return to shareholders.
Changes The investment objective, the equity/fixed income allocation
in targets and ranges, and, unless otherwise noted, other investment
Investment policies of each Portfolio described in this Prospectus may be
Objectives changed by the Board of Trustees without shareholder approval. If
and there is a change in a Portfolio's investment objective,
Policies allocation target or range, or other investment policies,
shareholders should consider whether the Portfolio remains an
appropriate investment in light of their then current financial
positions and needs.
Prospectus 22
<PAGE>
Underlying Funds
Each Portfolio invests all of its assets in Underlying Funds.
Accordingly, each Portfolio's investment performance depends upon
a favorable allocation among the Underlying Funds as well as the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved. Shares of the Underlying Funds
are not offered in this Prospectus.
Advisory PIMCO Advisors serves as investment adviser for each of the
ArrangementsUnderlying Stock Funds, except that its affiliate, Pacific
for the Investment Management Company, is the sole investment adviser to
Underlying PIMCO StocksPLUS Fund. The PIMCO Equity Advisors division of PIMCO
Funds Advisors manages the investments of several of the Underlying
Stock Funds. PIMCO Advisors retains sub-advisory firms to manage
the portfolios of other Underlying Stock Funds. These firms
include PIMCO/Allianz International Advisors LLC, Cadence Capital
Management, NFJ Investment Group and Parametric Portfolio
Associates, each of which is an affiliate of PIMCO Advisors, and
Blairlogie Capital Management, which is not an affiliate. Pacific
Investment Management Company is the sole investment adviser to
each of the Underlying Bond Funds. For a complete description of
the advisory and sub-advisory arrangements for the Underlying
Funds, please see the Statement of Additional Information and the
Underlying Fund prospectuses, which are incorporated herein by
reference and are available free of charge by telephoning the
Trust at 1-800-927-4648.
Underlying The following provides a concise description of the investment
Stock objective, main investments and other information about each
Funds Underlying Stock Fund. For a complete description of these Funds,
please see the Underlying Fund prospectuses, which are
incorporated herein by reference and are available free of charge
by telephoning the Trust at 1-800-927-4648.
<TABLE>
<CAPTION>
Approximate
PIMCO Investment Main Number of
Fund Objective Investments Holdings
---------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C>
Growth Stock Growth Long-term growth of Common stocks of 35-40
Funds capital; companies with market
income is an capitalizations of at
incidental least $5 billion
consideration
-------------------------------------------------------------------------------------
Target Capital appreciation; Common stocks of 40-60
no companies with market
consideration is capitalizations of
given to income between $1 billion and
$10 billion
-------------------------------------------------------------------------------------
Opportunity Capital appreciation; Common stocks of 60-100
no companies with market
consideration is capitalizations of
given to income between $100 million and
$2 billion
---------------------------------------------------------------------------------------------------
Blend Stock Capital Appreciation Growth of capital Common stocks of 60-100
Funds companies with market
capitalizations of at
least $1 billion that
have improving
fundamentals and whose
stock is reasonably
valued by the market
-------------------------------------------------------------------------------------
Mid-Cap Growth of capital Common stocks of 60-100
companies with market
capitalizations of more
than $500 million
(excluding the largest
200 companies) that have
improving fundamentals
and whose stock is
reasonably valued by the
market
-------------------------------------------------------------------------------------
Micro-Cap Long-term growth of Common stocks of 60-100
capital companies with market
capitalizations of less
than $250 million that
have improving
fundamentals and whose
stock is reasonably
valued by the market
</TABLE>
23 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Approximate
PIMCO Investment Main Number of
Fund Objective Investments Holdings
---------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C>
Value Stock Equity Income Current income as a Income-producing common 40-50
Funds primary objective; stocks of companies with
long-term growth of market capitalizations
capital is a of more than $2 billion
secondary objective
-----------------------------------------------------------------------------------------
Renaissance Long-term growth of Common stocks of 50-80
capital and income companies with below-
average valuations whose
business fundamentals
are expected to improve
-----------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of 40
capital and income companies with market
capitalizations of more
than $5 billion and
below average valuations
whose business
fundamentals are
expected to improve
-----------------------------------------------------------------------------------------
Small-Cap Value Long-term growth of Common stocks of 100
capital and income companies with market
capitalizations of
between $100 million and
$1.5 billion and below-
average price-to-
earnings ratios relative
to the market and their
industry groups
---------------------------------------------------------------------------------------------------------
Enhanced Index Tax-Efficient Equity Maximum after-tax A broadly diversified More than
Stock Funds growth of capital portfolio of at least 200
200 common stocks of
companies represented in
the S&P 500 Index with
market capitalizations
of more than $5 billion
-----------------------------------------------------------------------------------------
Enhanced Equity A total return which Common stocks 100-200
equals or exceeds the represented in the S&P
total return 500 Index with market
performance of an capitalizations of more
index (currently the than $5 billion
S&P 500 Index) that
represents the
performance of a
reasonably broad
spectrum of common
stocks that are
publicly traded in
the U.S.
-----------------------------------------------------------------------------------------
StocksPLUS Total return that S&P 500 stock index N/A
exceeds that of the derivatives backed by a
S&P 500 Index portfolio of short-term
fixed income securities
---------------------------------------------------------------------------------------------------------
International International Capital appreciation Common stocks of foreign 200-250
Stock Funds through investment in (non-U.S.) issuers
an international (developed and emerging
portfolio; income is markets) with market
an incidental capitalizations of more
consideration than $500 million
-----------------------------------------------------------------------------------------
Allianz Select Capital appreciation Common stocks of 30-60
International companies located
outside of the United
States with market
capitalizations of more
than $1 billion
-----------------------------------------------------------------------------------------
Structured Emerging Long-term growth of Common stocks of More than
Markets capital companies located in, or 300
whose principal business
operations are based in,
emerging markets
-----------------------------------------------------------------------------------------
Tax-Efficient Structured Long-term growth of Common stocks of More than
Emerging Markets capital. The Fund companies located in, or 300
also seeks to achieve whose principal business
higher after-tax operations are based in,
returns for its emerging markets
shareholders by using
a variety of tax-
efficient management
strategies
---------------------------------------------------------------------------------------------------------
Sector-Related Innovation Capital appreciation; Common stocks of 40
Stock Funds no consideration is technology-related
given to income companies with market
capitalizations of more
than $200 million
</TABLE>
Prospectus 24
<PAGE>
Underlying The investment objective of each Underlying Bond Fund (except as
Bond provided below) is to seek to realize maximum total return,
Funds consistent with preservation of capital and prudent investment
management. The "total return" sought by most of the Underlying
Bond Funds will consist of income earned on the Fund's
investments, plus capital appreciation, if any, which generally
arises from decreases in interest rates or improving credit
fundamentals for a particular sector or security. The investment
objective of PIMCO Real Return Bond Fund is to seek to realize
maximum real return, consistent with preservation of real capital
and prudent investment management. "Real return" is a measure of
the change in purchasing power of money invested in a particular
investment after adjusting for inflation. The investment objective
of each of PIMCO Money Market Fund and PIMCO Short-Term Fund is to
seek to obtain maximum current income, consistent with
preservation of capital and daily liquidity. PIMCO Money Market
Fund also attempts to maintain a stable net asset value of $1.00
per share, although there can be no assurance that it will be
successful in doing so.
The following provides a concise description of the main
investments of and other information relating to each Underlying
Bond Fund. For a complete description of these Funds, please see
the Underlying Fund prospectus for PIMCO Funds: Pacific Investment
Management Series, which is incorporated herein by reference and
is available free of charge by telephoning the Trust at 1-800-927-
4648.
<TABLE>
<CAPTION>
Non-U.S. Dollar
Denominated
PIMCO Fund Main Investments Duration Credit Quality(/1/) Securities(/2/)
---------------------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
Short Money Market Money market instruments Equal to/less than Min 95% Aaa or Prime 1; 0%
Duration Bond 90 days dollar- equal to/less than
Funds weighted average 5% Aa or Prime 2
maturity
------------------------------------------------------------------------------------------
Short-Term Money market instruments 0-1 yr B to Aaa; max 10% 0-5%
and below Baa
short maturity fixed
income
securities
------------------------------------------------------------------------------------------
Low Duration Short maturity fixed 1-3 yrs B to Aaa; max 10% 0-20%
income below Baa
securities
--------------------------------------------------------------------------------------------------------
Intermediate Moderate Duration Short and intermediate 2-5 yrs B to Aaa; max 10% 0-20%
Duration maturity below Baa
Bond Funds fixed income securities
------------------------------------------------------------------------------------------
Total Return Intermediate maturity 3-6 yrs B to Aaa; max 10% 0-20%
fixed below Baa
income securities
------------------------------------------------------------------------------------------
Total Return II Intermediate maturity 3-6 yrs Baa to Aaa 0%
fixed
income securities with
quality
and non-U.S. issuer
restrictions
--------------------------------------------------------------------------------------------------------
Long Duration Long-Term U.S. Long-term maturity fixed Greater than/ A to Aaa 0%
Bond Funds Government income equal to
securities 8 yrs.
--------------------------------------------------------------------------------------------------------
International Global Bond U.S. and non-U.S. 3-7 yrs B to Aaa; max 10% 25-75%
Bond Funds intermediate below Baa
maturity fixed income
securities
------------------------------------------------------------------------------------------
Foreign Bond Intermediate maturity 3-7 yrs B to Aaa; max 10% Greater than/
hedged below Baa equal to 85%
non-U.S. fixed income
securities
------------------------------------------------------------------------------------------
Emerging Markets Emerging market fixed 0-8 yrs B to Aaa Greater than/
Bond income equal to 80%
securities
--------------------------------------------------------------------------------------------------------
High Yield High Yield Higher yielding fixed 2-6 yrs B to Aaa; min 65% 0-15%
Bond Funds income below Baa
securities
--------------------------------------------------------------------------------------------------------
Inflation Real Return Bond Inflation-indexed fixed N/A B to Aaa; max 10% 0-20%
Indexed Bond income below Baa
Funds securities
</TABLE>
1. As rated by Moody's Investors Service, Inc., or equivalently
rated by Standard & Poor's Ratings Services, or if unrated, de-
termined by Pacific Investment Management Company to be of compa-
rable quality.
2. Percentage limitations relate to non-U.S. dollar-denominated
securities for all Underlying Bond Funds except PIMCO Global
Bond, Foreign Bond and Emerging Markets Bond Funds. Percentage
limitations for these three Funds relate to securities of non-
U.S. issuers, denominated in any currency. For the PIMCO High
Yield Fund, the percentage limitation relates to euro-denominated
securities. Each Underlying Bond Fund (except PIMCO Total Return
II and Long-Term U.S. Government Funds) may invest beyond these
limits in U.S. dollar-denominated securities of non-U.S. issuers.
Each Underlying Bond Fund invests at least 65% of its assets in
the following types of securities, which, unless provided above,
may be issued by domestic or foreign entities and denominated in
U.S. dollars or foreign currencies: securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities ("U.S. Government securities"); corporate debt
securities, including convertible securities and corporate
commercial paper; mortgage-backed and other asset-backed
securities; inflation-indexed bonds issued by both governments and
corporations; structured notes, including hybrid or "indexed"
securities, event-linked bonds and loan participations; delayed
funding loans and revolving credit facilities; bank certificates
of deposit, fixed time deposits and bankers' acceptances;
repurchase agreements and reverse repurchase agreements; debt
securities issued by states or local governments and their
agencies, authorities and other government-sponsored enterprises;
obligations of non-U.S. governments or their subdivisions,
agencies and government-sponsored enterprises; and obligations of
international agencies or supranational entities.
25 PIMCO Funds: Multi-Manager Series
<PAGE>
Other In addition to purchasing the securities listed above under "Main
Investment Investments," some or all of the Underlying Funds may to varying
Practices extents: lend portfolio securities; enter into repurchase
of the agreements and reverse repurchase agreements; purchase and sell
Underlying securities on a when-issued or delayed delivery basis; enter into
Funds forward commitments to purchase securities; purchase and write
call and put options on securities and securities indexes; enter
into futures contracts, options on futures contracts and swap
agreements; invest in foreign securities; and buy or sell foreign
currencies and enter into forward foreign currency contracts.
These and the other types of securities and investment techniques
used by the Underlying Funds all have attendant risks. The
Portfolios are indirectly subject to some or all of these risks to
varying degrees because they invest all of their assets in the
Underlying Funds. For further information concerning the
investment practices of and risks associated with the Underlying
Funds, please see "Investment Objectives and Policies" in the
Statement of Additional Information and the Underlying Fund
prospectuses, which are incorporated herein by reference and are
available free of charge by telephoning the Trust at 1-800-927-
4648.
Additional
Underlying Funds
In addition to the Funds listed above, a Portfolio may invest in
additional Underlying Funds, including those that may become
available for investment in the future, at the discretion of PIMCO
Advisors and without shareholder approval.
Other Risk Information
Potential PIMCO Advisors has broad discretion to allocate and reallocate the
Conflicts Portfolios' assets among the Underlying Funds consistent with the
of Portfolios' investment objectives and policies and asset
Interest allocation targets and ranges. Although PIMCO Advisors does not
charge an investment advisory fee for its asset allocation
services, PIMCO Advisors and its affiliates indirectly receive
fees (including investment advisory and administrative fees) from
the Underlying Funds in which the Portfolios invest. In this
regard, PIMCO Advisors has a financial incentive to invest a
Portfolio's assets in Underlying Funds with higher fees than other
Funds, even if it believes that alternate investments would better
serve the Portfolio's investment program. PIMCO Advisors is
legally obligated to disregard that incentive in making asset
allocation decisions for the Portfolios. The Trustees and officers
of the Trust may also have conflicting interests in fulfilling
their fiduciary duties to both the Portfolios and the Underlying
Funds of the Trust.
Management of the Portfolios
Investment
Adviser
and
Administrator
PIMCO Advisors serves as the investment adviser and the
administrator (serving in its capacity as administrator, the
"Administrator") for the Portfolios. Subject to the supervision of
the Board of Trustees, PIMCO Advisors is responsible for managing,
either directly or through others selected by it, the investment
activities of the Portfolios and the Portfolios' business affairs
and other administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of September 30, 2000, PIMCO Advisors and its subsidiary
partnerships had approximately $272 billion in assets under
management.
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Portfolios in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may retain
other affiliates to provide certain of these services.
Prospectus 26
<PAGE>
Asset PIMCO Advisors selects the Underlying Funds in which the
Allocation Portfolios may invest. PIMCO Advisors' Asset Allocation Committee
Committee is responsible for determining how the Portfolios' assets are
allocated and reallocated from time-to-time among the Underlying
Funds selected by PIMCO Advisors. The following provides
information about the individuals who comprise the Asset
Allocation Committee and are primarily responsible for making
asset allocation and other investment decisions for the
Portfolios.
<TABLE>
<CAPTION>
Asset Allocation
Committee Member Since Recent Professional Experience
----------------------------------------------------------------------------------------------
<C> <C> <S>
Udo Frank May, 2000 Managing Director and Chief Investment Officer of Allianz Asset
Advisory and Management GmbH, responsible for the entire investment
area (since 1997), and Chief Executive Officer and Chief Investment
Officer of Allianz PIMCO Asset Management. Previously, he served as
the Chief Investment Officer of Allianz KAG since 1994.
Kenneth W. Corba May, 2000 Managing Director and Chief Investment Officer of the PIMCO Equity
Advisors division of PIMCO 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 & Farnham Inc. from 1984 to 1995,
serving in various capacities including as Director of the Capital
Management Group, Senior Vice President and Portfolio Manager.
Colin Glinsman May, 2000 Chief Investment Officer of Oppenheimer Capital since 1999.
Previously, he served as a portfolio manager and research analyst
at Oppenheimer Capital from 1989 to 1999.
John Hague May, 2000 Managing Director of Pacific Investment Management Company LLC,
where he is a member of the Executive Committee and a senior member
of the Portfolio Management and Investment Strategy Groups. He
joined Pacific Investment Management Company LLC in 1987.
John Loftus May, 2000 Managing Director of Pacific Investment Management Company LLC,
where he is a senior member of its Investment Strategy Group. He
also heads the firm's product management area. He joined Pacific
Investment Management Company LLC in 1986.
</TABLE>
Advisory The Portfolios do not pay any fees to PIMCO Advisors under the
Fees Trust's investment advisory agreement in return for the advisory
and asset allocation services provided by PIMCO Advisors. The
Portfolios do, however, indirectly pay their proportionate share
of the advisory fees paid to PIMCO Advisors and Pacific Investment
Management Company by the Underlying Funds in which the Portfolios
invest. See "Underlying Fund Expenses" below.
Administrative
Fees
Institutional Class and Administrative Class shareholders of each
Portfolio pay an administrative fee to PIMCO Advisors, computed as
a percentage of the Portfolio's assets attributable in the
aggregate to those classes of shares. PIMCO Advisors, in turn,
provides or procures administrative services for Institutional
Class and Administrative Class shareholders and also bears the
costs of most third-party services required by the Portfolios,
including audit, custodial, portfolio accounting, legal, transfer
agency and printing costs. The Portfolios do bear other expenses
which are not covered under the administrative fee which may vary
and affect the total level of expenses paid by Institutional Class
and Administrative Class shareholders, such as brokerage fees,
commissions and other transaction expenses, costs of borrowing
money, including interest expenses, and fees and expenses of the
Trust's disinterested Trustees.
Each Portfolio pays monthly administrative fees to PIMCO
Advisors at an annual rate of 0.15% based on the average daily net
assets attributable in the aggregate to the Portfolio's
Institutional Class and Administrative Class shares. In order to
reduce expenses, PIMCO Advisors has voluntarily undertaken to
waive a portion of the administrative fees it is entitled to
receive for Institutional Class and Administrative Class shares of
each Portfolio until further notice. As a result, while the waiver
is in effect, each Portfolio will pay administrative fees to PIMCO
Advisors at the annual rate of 0.10%, calculated in the manner
specified above. The Portfolios also indirectly pay their
proportionate share of the administrative fees charged by PIMCO
Advisors and Pacific Investment Management Company to the
Underlying Funds in which the Portfolios invest. See "Underlying
Fund Expenses" below.
Underlying
Fund
Expenses The expenses associated with investing in a "fund of funds," such
as the Portfolios, are generally higher than those for mutual
funds that do not invest primarily in other mutual funds. This is
because shareholders in a "fund of funds" indirectly pay a portion
of the fees and expenses charged at the underlying fund level.
27 PIMCO Funds: Multi-Manager Series
<PAGE>
The Portfolios are structured in the following ways to lessen
the impact of expenses incurred at the Underlying Fund level:
. The Portfolios do not pay any fees for asset allocation or
advisory services under the Trust's investment advisory
agreement.
. The Underlying Funds invest in Institutional Class shares of
the Underlying Funds, which are not subject to any sales
charges or 12b-1 fees.
The following table summarizes the annual expenses borne by
Institutional Class shareholders of the Underlying Funds (based on
estimates for the current fiscal year). Because the Portfolios
invest in Institutional Class shares of the Underlying Funds,
shareholders of each Portfolio indirectly bear a proportionate
share of these expenses, depending upon how the Portfolio's assets
are allocated from time to time among the Underlying Funds. See
"Fees and Expenses of the Portfolio" in each Portfolio Summary
above.
<TABLE>
<CAPTION>
Annual Underlying Fund Expenses
(Based on the average daily net assets
attributable to a Fund's Institutional Class
shares):
Advisory Admini- Other Total Fund
Underlying Fund Fees strative Fees Expenses Operating Expenses
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
PIMCO Growth 0.50% 0.25% 0.02% 0.77%
-----------------------------------------------------------------------
PIMCO Target 0.55 0.25 0.01 0.81
-----------------------------------------------------------------------
PIMCO Opportunity 0.65 0.25 0.01 0.91
-----------------------------------------------------------------------
PIMCO Capital
Appreciation 0.45 0.25 0.01 0.71
-----------------------------------------------------------------------
PIMCO Mid-Cap 0.45 0.25 0.01 0.71
-----------------------------------------------------------------------
PIMCO Micro-Cap 1.25 0.25 0.01 1.51
-----------------------------------------------------------------------
PIMCO Equity Income 0.45 0.25 0.02 0.72
-----------------------------------------------------------------------
PIMCO Renaissance 0.60 0.25 0.00 0.85
-----------------------------------------------------------------------
PIMCO Value 0.45 0.25 0.00 0.70
-----------------------------------------------------------------------
PIMCO Small-Cap Value 0.60 0.25 0.01 0.86
-----------------------------------------------------------------------
PIMCO Tax-Efficient
Equity 0.45 0.25 0.01 0.71
-----------------------------------------------------------------------
PIMCO Enhanced Equity 0.45 0.25 0.01 0.71
-----------------------------------------------------------------------
PIMCO StocksPLUS 0.40 0.25 0.00 0.65
-----------------------------------------------------------------------
PIMCO International 0.55 0.50 0.08 1.13
-----------------------------------------------------------------------
PIMCO Allianz Select
International 0.75 0.50 0.00 1.25
-----------------------------------------------------------------------
PIMCO Structured
Emerging Markets 0.45 0.50 0.29 1.24
-----------------------------------------------------------------------
PIMCO Tax-Efficient
Structured Emerging
Markets 0.45 0.50 0.05 1.00
-----------------------------------------------------------------------
PIMCO Innovation 0.65 0.25 0.00 0.90
-----------------------------------------------------------------------
PIMCO Money Market 0.15 0.20 0.00 0.35
-----------------------------------------------------------------------
PIMCO Short-Term 0.25 0.20 0.19 0.64
-----------------------------------------------------------------------
PIMCO Low Duration 0.25 0.18 0.08 0.51
-----------------------------------------------------------------------
PIMCO Moderate Duration 0.25 0.20 0.02 0.47
-----------------------------------------------------------------------
PIMCO Total Return 0.25 0.18 0.11 0.54
-----------------------------------------------------------------------
PIMCO Total Return II 0.25 0.25 0.00 0.50
-----------------------------------------------------------------------
PIMCO Long-Term U.S.
Government 0.25 0.25 0.07 0.57
-----------------------------------------------------------------------
PIMCO Global Bond 0.25 0.30 0.16 0.71
-----------------------------------------------------------------------
PIMCO Foreign Bond 0.25 0.25 0.19 0.69
-----------------------------------------------------------------------
PIMCO Emerging Markets
Bond 0.45 0.40 0.04 0.89
-----------------------------------------------------------------------
PIMCO High Yield 0.25 0.25 0.00 0.50
-----------------------------------------------------------------------
PIMCO Real Return Bond 0.25 0.25 0.03 0.53
</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.
Prospectus 28
<PAGE>
Investment Options --
Institutional Class and Administrative Class Shares
The Trust offers investors Institutional Class and Administrative
Class shares of the Portfolios in this Prospectus.
The Trust does not charge any sales charges (loads) or other fees
in connection with purchases, sales (redemptions) or exchanges of
Institutional Class or Administrative Class shares. Administrative
Class shares are generally subject to a higher level of operating
expenses than Institutional Class shares due to the additional
service and/or distribution fees paid by Administrative Class
shares as described below. Therefore, Institutional Class shares
will generally pay higher dividends and have a more favorable
investment return than Administrative Class shares.
. Service and Distribution (12b-1) Fees--Administrative Class
Shares. The Trust has adopted an Administrative Services Plan and
a Distribution Plan for the Administrative Class shares of each
Portfolio. Each Plan has been adopted in accordance with the
requirements of Rule 12b-1 under the Investment Company Act of
1940 and is administered in accordance with that rule. However,
shareholders do not have the voting rights set forth in Rule 12b-1
with respect to the Administrative Services Plan.
Each Plan allows the Portfolios to use their Administrative Class
assets to reimburse financial intermediaries that provide services
relating to Administrative Class shares. The Distribution Plan
permits reimbursement for expenses in connection with the
distribution and marketing of Administrative Class shares and/or
the provision of shareholder services to Administrative Class
shareholders. The Administrative Services Plan permits
reimbursement for services in connection with the administration
of plans or programs that use Administrative Class shares of the
Portfolios as their funding medium and for related expenses.
In combination, the Plans permit a Portfolio to make total
reimbursements at an annual rate of up to 0.25% of the Portfolio's
average daily net assets attributable to its Administrative Class
shares. The same entity may not receive both distribution and
administrative services fees with respect to the same
Administrative Class assets, but may receive fees under each Plan
with respect to separate assets. Because these fees are paid out
of a Portfolio's Administrative Class assets on an ongoing basis,
over time they will increase the cost of an investment in
Administrative Class shares and may cost an investor more than
other types of sales charges.
. Arrangements with Service Agents. Institutional Class and
Administrative Class shares of the Portfolios may be offered
through certain brokers and financial intermediaries ("service
agents") that have established a shareholder servicing
relationship with the Trust on behalf of their customers. The
Trust pays no compensation to such entities other than service
and/or distribution fees paid with respect to Administrative Class
shares. Service agents may impose additional or different
conditions than the Trust on purchases, redemptions or exchanges
of Portfolio shares by their customers. Service agents may also
independently establish and charge their customers transaction
fees, account fees and other amounts in connection with purchases,
sales and redemptions of Portfolio shares in addition to any fees
charged by the Trust. These additional fees may vary over time and
would increase the cost of the customer's investment and lower
investment returns. Each service agent is responsible for
transmitting to its customers a schedule of any such fees and
information regarding any additional or different conditions
regarding purchases, redemptions and exchanges. Shareholders who
are customers of service agents should consult their service
agents for information regarding these fees and conditions.
29 PIMCO Funds: Multi-Manager Series
<PAGE>
Purchases, Redemptions and Exchanges
Investors may purchase Institutional Class and Administrative
Purchasing Class shares of the Portfolios at the relevant net asset value
Shares ("NAV") of that class without a sales charge or other fee.
Institutional Class shares are offered primarily for direct
investment by investors such as pension and profit sharing plans,
employee benefit trusts, endowments, foundations, corporations and
high net worth individuals. Institutional Class shares may also be
offered through certain financial intermediaries that charge their
customers transaction or other fees with respect to their
customers' investments in the Portfolios.
Administrative Class shares are offered primarily through
employee benefit plan alliances, broker-dealers and other
intermediaries, and each Portfolio pays service and/or
distribution fees to these entities for services they provide to
Administrative Class shareholders.
Pension and profit-sharing plans, employee benefit trusts and
employee benefit plan alliances and "wrap account" programs
established with broker-dealers or financial intermediaries may
purchase shares of either class only if the plan or program for
which the shares are being acquired will maintain an omnibus or
pooled account for each Portfolio and will not require a Portfolio
to pay any type of administrative payment per participant account
to any third party.
. Investment Minimums. The minimum initial investment for shares
of either class is $5 million, except that the minimum initial
investment for a registered investment adviser purchasing
Institutional Class shares for its clients through omnibus
accounts is $250,000 per Portfolio. At the discretion of PIMCO
Advisors, the minimum initial investment may be waived for
Institutional or Administrative Class shares offered to clients of
PIMCO Equity Advisors, PIMCO/Allianz International Advisors,
Cadence, NFJ, Pacific Investment Management Company, Parametric
and their affiliates, and to the benefit plans of PIMCO Advisors
and its affiliates. In addition, the minimum initial investment
does not apply to Institutional Class shares offered through fee-
based programs sponsored and maintained by a registered broker-
dealer and approved by the Distributor in which each investor pays
an asset based fee at an annual rate of at least 0.50% of the
assets in the account to a financial intermediary for investment
advisory and/or administrative services.
The Trust and the Distributor may waive the minimum initial
investment for other categories of investors at their discretion.
The investment minimums discussed in this section do not apply to
participants in PIMCO Advisors Portfolio Strategies, a managed
product sponsored by PIMCO Advisors.
. Timing of Purchase Orders and Share Price Calculations. A
purchase order received by the Trust's transfer agent, National
Financial Data Services (the "Transfer Agent"), prior to the close
of regular trading (normally 4:00 p.m., Eastern time) on the New
York Stock Exchange, on a day the Trust is open for business,
together with payment made in one of the ways described below,
will be effected at that day's net asset value ("NAV"). An order
received after the close of regular trading on the New York Stock
Exchange will be effected at the NAV determined on the next
business day. However, orders received by certain retirement plans
and other financial intermediaries on a business day prior to the
close of regular trading on the New York Stock Exchange and
communicated to the Transfer Agent prior to 9:00 a.m., Eastern
time, on the following business day will be effected at the NAV
determined on the prior business day. The Trust is "open for
business" on each day the New York Stock Exchange is open for
trading, which excludes the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Purchase orders will be accepted only on days on
which the Trust is open for business.
. Initial Investment. Investors may open an account by
completing and signing a Client Registration Application and
mailing it to PIMCO Funds at 840 Newport Center Drive, Suite 300,
Newport Beach, California 92660. A Client Registration Application
may be obtained by calling 1-800-927-4648.
Except as described below, an investor may purchase Institutional
Class and Administrative Class shares only by wiring federal funds
to the Transfer Agent, National Financial Data Services, 330 West
9th Street, 4th Floor, Kansas City, Missouri 64105. Before wiring
federal funds, the investor must telephone the Trust at 1-800-927-
4648 to receive instructions for wire transfer and must provide
the following information: name of authorized person, shareholder
name, shareholder account number, name of Portfolio and share
class, amount being wired, and wiring bank name.
Prospectus 30
<PAGE>
An investor may purchase shares without first wiring federal
funds if the proceeds of the investment are derived from an
advisory account the investor maintains with PIMCO Advisors or one
of its affiliates, from surrender or other payment from an
annuity, insurance, or other contract held by Pacific Life
Insurance Company LLC, or from an investment by broker-dealers,
institutional clients or other financial intermediaries which have
established a shareholder servicing relationship with the Trust on
behalf of their customers.
. Additional Investments. An investor may purchase additional
Institutional Class and Administrative Class shares of the
Portfolios at any time by calling the Trust and wiring federal
funds to the Transfer Agent as outlined above.
. Other Purchase Information. Purchases of a Portfolio's
Institutional Class and Administrative Class shares will be made
in full and fractional shares. In the interest of economy and
convenience, certificates for shares will not be issued.
The Trust and the Distributor each reserves the right, in its
sole discretion, to suspend the offering of shares of the
Portfolios or to reject any purchase order, in whole or in part,
when, in the judgment of management, such suspension or rejection
is in the best interests of the Trust.
An investor should invest in the Portfolios for long-term
investment purposes only. The Trust and PIMCO Advisors each
reserves the right to restrict purchases of Portfolio shares
(including exchanges) when a pattern of frequent purchases and
sales made in response to short-term fluctuations in share price
appears evident. Notice of any such restrictions, if any, will
vary according to the particular circumstances.
Institutional Class and Administrative Class shares of the Trust
may not be qualified or registered for sale in all states.
Investors should inquire as to whether shares of a particular
Portfolio are available for offer and sale in the investor's state
of residence. Shares of the Trust may not be offered or sold in
any state unless registered or qualified in that jurisdiction or
unless an exemption from registration or qualification is
available.
. Retirement Plans. Shares of the Portfolios are available for
purchase by retirement and savings plans, including Keogh plans,
401(k) plans, 403(b) custodial accounts, and Individual Retirement
Accounts. The administrator of a plan or employee benefits office
can provide participants or employees with detailed information on
how to participate in the plan and how to elect a Portfolio as an
investment option. Participants in a retirement or savings plan
may be permitted to elect different investment options, alter the
amounts contributed to the plan, or change how contributions are
allocated among investment options in accordance with the plan's
specific provisions. The plan administrator or employee benefits
office should be consulted for details. For questions about
participant accounts, participants should contact their employee
benefits office, the plan administrator, or the organization that
provides recordkeeping services for the plan. Investors who
purchase shares through retirement plans should be aware that plan
administrators may aggregate purchase and redemption orders for
participants in the plan. Therefore, there may be a delay between
the time the investor places an order with the plan administrator
and the time the order is forwarded to the Transfer Agent for
execution.
Redeeming . Redemptions by Mail. An investor may redeem (sell)
Shares Institutional Class and Administrative Class shares by submitting
a written request to PIMCO Funds at 840 Newport Center Drive,
Suite 300, Newport Beach, California 92660. The redemption request
should state the Portfolio from which the shares are to be
redeemed, the class of shares, the number or dollar amount of the
shares to be redeemed and the account number. The request must be
signed exactly as the names of the registered owners appear on the
Trust's account records, and the request must be signed by the
minimum number of persons designated on the Client Registration
Application that are required to effect a redemption.
. Redemptions by Telephone or Other Wire Communication. An
investor that elects this option on the Client Registration
Application (or subsequently in writing) may request redemptions
of shares by calling the Trust at 1-800-927-4648, by sending a
facsimile to 1-949-725-6830, by sending an e-mail to
[email protected], or by other means of wire
communication. Investors should state the Portfolio and class from
which the shares are to be redeemed, the number or dollar amount
of the shares to be redeemed, the account number and the signature
(which may be an electronic signature) of an authorized signatory.
Redemption requests of an amount of $10 million or more may be
initiated by telephone, wire or e-mail, but must be confirmed in
writing by an authorized party prior to processing.
In electing a telephone redemption, the investor authorizes
Pacific Investment Management Company and the Transfer Agent to
act on telephone instructions from any person representing himself
to be the investor, and reasonably believed by Pacific Investment
Management Company or the Transfer Agent to be genuine. Neither
the Trust nor the Transfer Agent may be liable for any loss, cost
or expense for acting on
31 PIMCO Funds: Multi-Manager Series
<PAGE>
instructions (whether in writing or by telephone) believed by the
party receiving such instructions to be genuine and in accordance
with the procedures described in this Prospectus. Shareholders
should realize that by electing the telephone, wire or e-mail
redemption option, they may be giving up a measure of security
that they might have if they were to redeem their shares in
writing. Furthermore, interruptions in service may mean that a
shareholder will be unable to effect a redemption by telephone or
e-mail when desired. The Transfer Agent also provides written
confirmation of transactions initiated by telephone as a procedure
designed to confirm that telephone instructions are genuine
(written confirmation is also provided for redemption requests
received in writing or via e-mail). All telephone transactions are
recorded, and Pacific Investment Management Company or the
Transfer Agent may request certain information in order to verify
that the person giving instructions is authorized to do so. The
Trust or Transfer Agent may be liable for any losses due to
unauthorized or fraudulent telephone transactions if it fails to
employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. All redemptions, whether
initiated by letter or telephone, will be processed in a timely
manner, and proceeds will be forwarded by wire in accordance with
the redemption policies of the Trust detailed below. See "Other
Redemption Information."
Shareholders may decline telephone exchange or redemption
privileges after an account is opened by instructing the Transfer
Agent in writing at least seven business days prior to the date
the instruction is to be effective. Shareholders may experience
delays in exercising telephone redemption privileges during
periods of abnormal market activity. During periods of volatile
economic or market conditions, shareholders may wish to consider
transmitting redemption orders by telegram, facsimile or overnight
courier.
Defined contribution plan participants may request redemptions by
contacting the employee benefits office, the plan administrator or
the organization that provides recordkeeping services for the
plan.
. Timing of Redemption Requests and Share Price Calculations. A
redemption request received by the Trust or its designee prior to
the close of regular trading on the New York Stock Exchange
(normally 4:00 p.m., Eastern time), on a day the Trust is open for
business, is effective on that day. A redemption request received
after that time becomes effective on the next business day.
Redemption requests for Portfolio shares are effected at the NAV
per share next determined after receipt of a redemption request by
the Trust or its designee. The request must properly identify all
relevant information, such as account number, redemption amount
(in dollars or shares) and the Portfolio name, and must be
executed or initialed by the appropriate signatories.
. Other Redemption Information. Redemption proceeds will
ordinarily be wired to the investor's bank within three business
days after the redemption request, but may take up to seven
business days. Redemption proceeds will be sent by wire only to
the bank name designated on the Client Registration Application.
The Trust may suspend the right of redemption or postpone the
payment date at times when the New York Stock Exchange is closed,
or during certain other periods as permitted under the federal
securities laws.
For shareholder protection, a request to change information
contained in an account registration (for example, a request to
change the bank designated to receive wire redemption proceeds)
must be received in writing, signed by the minimum number of
persons designated on the Client Registration Application that are
required to effect a redemption, and accompanied by a signature
guarantee from any eligible guarantor institution, as determined
in accordance with the Trust's procedures. Shareholders should
inquire as to whether a particular institution is an eligible
guarantor institution. A signature guarantee cannot be provided by
a notary public. In addition, corporations, trusts, and other
institutional organizations are required to furnish evidence of
the authority of the persons designated on the Client Registration
Application to effect transactions for the organization.
Due to the relatively high cost of maintaining small accounts,
the Trust reserves the right to redeem Institutional Class and
Administrative Class shares in any account for their then-current
value (which will be promptly paid to the investor) if at any
time, due to redemption by the investor, the shares in the account
do not have a value of at least $100,000. A shareholder will
receive advance notice of a mandatory redemption and will be given
at least 30 days to bring the value of its account up to at least
$100,000. This mandatory redemption policy does not apply to
participants in PIMCO Advisors Portfolio Strategies, a managed
product sponsored by PIMCO Advisors.
The Trust agrees to redeem shares of each Portfolio solely in
cash up to the lesser of $250,000 or 1% of the Portfolio's net
assets during any 90-day period for any one shareholder. In
consideration of the best interests of the remaining shareholders,
the Trust reserves the right to pay any redemption proceeds
exceeding this amount in whole or in part by a distribution in
kind of securities held by a Portfolio in lieu of cash. When
shares are redeemed in kind, the redeeming shareholder may incur
transaction costs upon the disposition of the securities received
in the distribution.
Prospectus 32
<PAGE>
Redemption of Portfolio shares may be suspended when trading on
the New York Stock Exchange is restricted or during an emergency
which makes it impracticable for the Portfolios or the Underlying
Funds to dispose of their securities or to determine fairly the
value of their net assets, or duing 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.
Exchange An investor may exchange Institutional Class or Administrative
Privilege Class shares of a Portfolio for shares of the same class of any
other Portfolio or other series of the Trust that offers that
class based on the respective NAVs of the shares involved, subject
to any restrictions on exchanges set forth in the applicable
Fund's or series' prospectus(es). An exchange may be made by
following the redemption procedure described above under
"Redemptions by Mail" or, if the investor has elected the
telephone redemption option, by calling the Trust at 1-800-927-
4648. An investor may also exchange shares of a Portfolio for
shares of the same class of a series of PIMCO Funds: Pacific
Investment Management Series, an affiliated mutual fund family
composed primarily of fixed income portfolios managed by Pacific
Investment Management Company. Shareholders interested in such an
exchange may request a prospectus for these other series by
contacting PIMCO Funds: Pacific Investment Management Series at
the same address and telephone number as the Trust.
An investor may exchange shares only with respect to Portfolios
or other eligible series that are registered in the investor's
state of residence or where an exemption from registration is
available. In addition, an exchange is generally a taxable event
which will generate capital gains or losses, and special rules may
apply in computing tax basis when determining gain or loss. See
"Tax Consequences" in this Prospectus and "Taxation" in the
Statement of Additional Information.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Portfolio and its shareholders. In particular, a pattern
of exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Portfolio. Currently, the Trust limits the number of
"round trip" exchanges investors may make. An investor makes a
"round trip" exchange when the investor purchases shares of a
particular Portfolio, subsequently exchanges those shares for
shares of a different Portfolio or other PIMCO Fund, and then
exchanges back into the originally purchased Portfolio. The Trust
has the right to refuse any exchange for any investor who
completes (by making the exchange back into the shares of the
originally purchased Portfolio) more than six round trip exchanges
in any twelve-month period. The Trust reserves the right to impose
additional restrictions on exchanges at any time, although it will
attempt to give shareholders 30 days' prior notice whenever it is
reasonably able to do so.
How Portfolio Shares Are Priced
The net asset value ("NAV") of a Portfolio's Institutional Class
and Administrative Class shares is determined by dividing the
total value of a Portfolio's investments and other assets
attributable to that class, less any liabilities, by the total
number of shares outstanding of that class.
The assets of each Portfolio consist of shares of the Underlying
Funds, which are valued at their respective NAVs at the time of
valuation of the Portfolios' shares. For purposes of calculating
the NAV of Underlying Fund shares, portfolio securities and other
assets of the Funds for which market quotes are available are
stated at market value. Market value is generally determined on
the basis of last reported sales prices, or if no sales are
reported, based on quotes obtained from a quotation reporting
system, established market makers, or pricing services. Certain
securities or investments for which daily market quotes are not
readily available may be valued, pursuant to procedures
established by the Board of Trustees of the Underlying Fund, with
reference to other securities or indices. Short-term investments
having a maturity of 60 days or less are generally valued at
amortized cost. Exchange traded options, futures and options on
futures are valued at the settlement price determined by the
exchange. Other securities for which market quotes are not readily
available are valued at fair value as determined in good faith by
the Fund's Board of Trustees or persons acting at the Board's
direction.
Underlying Fund investments initially valued in currencies other
than the U.S. dollar are converted to U.S. dollars using exchange
rates obtained from pricing services. As a result, the NAV of an
Underlying Fund's shares may be affected by changes in the value
of currencies in relation to the U.S. dollar. The value of
securities traded in markets outside the United States or
denominated in currencies other than the U.S. dollar
33 PIMCO Funds: Multi-Manager Series
<PAGE>
may be affected significantly on a day that the New York Stock
Exchange is closed. As a result, to the extent that a Portfolio
invests in Underlying Funds that hold foreign securities, the NAV
of the Portfolio's shares may change at times when you can not
purchase, redeem or exchange shares.
Portfolio and Underlying Fund shares are valued at the close of
regular trading (normally 4:00 p.m., Eastern time) (the "NYSE
Close") on each day that the New York Stock Exchange is open. For
purposes of calculating the NAV, the Underlying Funds normally use
pricing data for domestic equity securities received shortly after
the NYSE Close and do not normally take into account trading,
clearances or settlements that take place after the NYSE Close.
Domestic fixed income and foreign securities are normally priced
using data reflecting the earlier closing of the principal markets
for those securities. Information that becomes known to the
Underlying Funds or their agents after the NAV has been calculated
on a particular day will not generally be used to retroactively
adjust the price of a security or the NAV determined earlier that
day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Underlying Funds may value securities at fair
value or estimate their value as determined in good faith by the
Fund's Board of Trustees or persons acting at their direction
pursuant to procedures approved by the Board of Trustees. Fair
valuation may also be used by the Underlying Fund's Board of
Trustees if extraordinary events occur after the close of the
relevant market but prior to the NYSE Close.
Portfolio Distributions
Each Portfolio distributes substantially all of its net investment
income to shareholders in the form of dividends. A shareholder
begins earning dividends on Portfolio shares the day after the
Trust receives the shareholder's purchase payment. Dividends paid
by each Portfolio with respect to each class of shares are
calculated in the same manner and at the same time, but dividends
on Administrative Class shares are expected to be lower than
dividends on Institutional Class shares as a result of the service
and/or distribution fees applicable to Administrative Class
shares. The following shows when each Portfolio intends to declare
and distribute income dividends to shareholders of record.
<TABLE>
<CAPTION>
Portfolio At Least Annually Quarterly Monthly
---------------------------------------------------------------------------
<S> <C> <C> <C>
90/10 Portfolio .
---------------------------------------------------------------------------
60/40 Portfolio .
---------------------------------------------------------------------------
30/70 Portfolio .
---------------------------------------------------------------------------
</TABLE>
In addition, each Portfolio distributes any net capital gains it
earns from the sale of portfolio securities to shareholders no
less frequently than annually. Net short-term capital gains may be
paid more frequently.
A Portfolio's dividend and capital gain distributions with
respect to a particular class of shares will automatically be
reinvested in additional shares of the same class of the Portfolio
at NAV unless the shareholder elects to have the distributions
paid in cash. A shareholder may elect to have distributions paid
in cash on the Client Registration Application or by submitting a
written request, signed by the appropriate signatories, indicating
the account number, Portfolio name(s) and wiring instructions.
Shareholders do not pay any sales charges or other fees on the
receipt of shares received through the reinvestment of Portfolio
distributions.
For further information on distribution options, please contact
the Trust at 1-800-927-4648.
Tax Consequences
. Taxes on Portfolio Distributions. A shareholder subject to U.S.
federal income tax will be subject to tax on Portfolio
distributions whether they are paid in cash or reinvested in
additional shares of the Portfolios. For federal income tax
purposes, Portfolio distributions will be taxable to the
shareholder as either ordinary income or capital gains.
Portfolio dividends (i.e., distributions of investment income)
are taxable to shareholders as ordinary income. Federal taxes on
Portfolio distributions of gains are determined by how long the
Portfolio owned the investments that generated the gains, rather
than how long the shareholder owned the shares. Distributions of
gains from investments that a Portfolio owned for more than 12
months will generally be taxable to shareholders as capital gains.
Distributions of gains from investments that the Portfolio owned
for 12 months or less will generally be taxable as ordinary
income.
Prospectus 34
<PAGE>
Portfolio distributions are taxable to shareholders even if they
are paid from income or gains earned by a Portfolio prior to the
shareholder's investment and thus were included in the price paid
for the shares. For example, a shareholder who purchases shares on
or just before the record date of a Portfolio distribution will
pay full price for the shares and may receive a portion of his or
her investment back as a taxable distribution.
The Portfolios' use of a fund of funds structure could affect the
amount, timing and character of distributions to shareholders. See
"Taxation--Distributions" in the Statement of Additional
Information.
. Taxes on Redemptions or Exchanges of Shares. Any gain resulting
from the sale of Portfolio shares will generally be subject to
federal income tax. When a shareholder exchanges shares of a
Portfolio for shares of another Portfolio or series of the Trust,
the transaction will be treated as a sale of the first Portfolio's
shares for these purposes, and any gain on those shares will
generally be subject to federal income tax.
This section relates only to federal income tax; the consequences
under other tax laws may differ. Shareholders should consult their
tax advisors as to the possible application of foreign, state and
local income tax laws to Portfolio dividends and capital
distributions. Please see the Statement of Additional Information
for additional information regarding the tax aspects of investing
in the Portfolios.
35 PIMCO Funds: Multi-Manager Series
<PAGE>
(This page left blank intentionally)
Prospectus 36
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Institutional Class and
Administrative Class shares of each Portfolio since the class of
shares was first offered. Certain information reflects financial
results for a single Portfolio share. The total returns in the
table represent the rate that an investor would have earned or
lost on an investment in a particular class of shares of a
Portfolio, assuming reinvestment of all dividends and
distributions. This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with each
Portfolio's financial statements, are included in the Trust's
annual report to shareholders. The annual report is incorporated
by reference in the Statement of Additional Information and is
available free of charge upon request from the Distributor.
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Distributions
Year or Value Net Unrealized Income from from Net from Net
Period Beginning Investment Gain (Loss) on Investment Investment Realized
Ended of Period Income Investments Operations Income Capital Gains
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
90/10 Portfolio
Institutional
Class
06/30/00 $12.19 $0.59(a) $0.86(a) $1.45 $(0.19) $(0.59)
06/30/99 (b) 10.91 0.05(a) 1.23(a) 1.28 0.00 0.00
Administrative
Class
06/30/00 12.18 0.56(a) 0.85(a) 1.41 (0.17) (0.59)
06/30/99 (b) 10.91 0.04(a) 1.23(a) 1.27 0.00 0.00
60/40 Portfolio
Institutional
Class
06/30/00 $11.27 $0.63(a) $0.45(a) $1.08 $(0.41) $(0.44)
06/30/99 (b) 10.55 0.09(a) 0.73(a) 0.82 (0.10) 0.00
Administrative
Class
06/30/00 11.27 0.60(a) 0.45(a) 1.05 (0.38) (0.44)
06/30/99 (b) 10.55 0.09(a) 0.72(a) 0.81 (0.09) 0.00
30/70 Portfolio
Institutional
Class
06/30/00 $10.33 $0.64(a) $0.11(a) $0.75 $(0.53) $(0.19)
06/30/99 (b) 10.09 0.15(a) 0.23(a) 0.38 (0.14) 0.00
Administrative
Class
06/30/00 10.33 0.61(a) 0.11(a) 0.72 (0.50) (0.19)
06/30/99 (b) 10.09 0.14(a) 0.23(a) 0.37 (0.13) 0.00
</TABLE>
-------
*Annualized
(a)Per share amounts based on average number of shares outstanding during the
period.
(b) Commenced operations on February 26, 1999.
37 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Net Assets Expenses to Income (Loss)
Return of Total Value End End of Average Net to Average Portfolio
Capital Distributions of Period Total Return Period (000s) Assets Net Assets Turnover Rate
-----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0.00 $(0.78) $12.86 12.20% $13 0.10% 4.71% 18%
0.00 0.00 12.19 11.73 11 0.10* 1.17* 48
0.00 (0.76) 12.83 11.91 12 0.35 4.46 18
0.00 0.00 12.18 11.64 11 0.35* 0.95* 48
$0.00 $(0.85) $11.50 9.90% $57 0.10% 5.51% 44%
0.00 (0.10) 11.27 7.80 11 0.10* 2.52 * 39
0.00 (0.82) 11.50 9.63 12 0.35 5.26 44
0.00 (0.09) 11.27 7.71 11 0.35* 2.44* 39
$0.00 $(0.72) $10.36 7.47% $11 0.10% 6.19% 52%
0.00 (0.14) 10.33 3.78 10 0.10* 4.20* 37
0.00 (0.69) 10.36 7.21 11 0.35 5.95 52
0.00 (0.13) 10.33 3.70 10 0.35* 4.03* 37
</TABLE>
Prospectus
38
<PAGE>
(This page left blank intentionally)
<PAGE>
(This page left blank intentionally)
<PAGE>
(This page left blank intentionally)
<PAGE>
-------------------------------------------------------------------
PIMCO INVESTMENT ADVISER AND ADMINISTRATOR
Funds: PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Multi- 92660
Manager
Series
-------------------------------------------------------------------
CUSTODIAN
State Street Bank & Trust Co., 801 Pennsylvania, Kansas City, MO
64105
-------------------------------------------------------------------
TRANSFER AGENT
National Financial Data Services, 330 W. 9th Street, 4th Floor,
Kansas City, MO 64105
-------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
-------------------------------------------------------------------
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
-------------------------------------------------------------------
Not part of the Prospectus
<PAGE>
The Trust's Statement of Additional Information ("SAI") and annual and
semi-annual reports to shareholders include additional information about the
Funds. The SAI and the financial statements included in the Funds' most recent
annual report to shareholders are incorporated by reference into this
Prospectus, which means they are part of this Prospectus for legal purposes.
The Funds' annual report discusses the market conditions and investment
strategies that significantly affected each Fund's performance during its last
fiscal year.
You may get free copies of any of these materials, request other information
about a Fund, or make shareholder inquiries by calling the Trust at
1-800-927-4648 or PIMCO Infolink Audio Response Network at 1-800-987-4626, or by
writing to:
PIMCO Funds:
Multi-Manager Series
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
You may review and copy information about the Trust, including its SAI, at the
Securities and Exchange Commission's public reference room in Washington, D.C.
You may call the Commission at 1-202-942-8090 for information about the
operation of the public reference room. You may also access reports and other
information about the Trust on the Commission's Web site at www.sec.gov. You may
get copies of this information, with payment of a duplication fee, by writing
the Public Reference Section of the Commission, Washington, D.C. 20549-6009, or
by e-mailing your request to [email protected]. Reference the Trust's
Investment Company Act file number in your correspondence.
Investment Company Act File No. 811-6161
[PIMCO Logo appears here]
PIMCO Funds
849 Newport Center Drive
Suite 300
Newport Beach, CA 92660
PY000.11/00
<PAGE>
NOVEMBER 1, 2000
PIMCO FUNDS PROSPECTUS
Share Classes PIMCO Funds Asset Allocation Series consists of three
A B C actively managed mutual funds that invest in a diversified
portfolio of PIMCO Funds. In addition to broad
diversification, each Portfolio provides access to the
extensive asset allocation and investment management
capabilities of PIMCO Advisors L.P. and its affiliates.
90/10 Portfolio
60/40 Portfolio
30/70 Portfolio
This cover is not part of the Prospectus. [LOGO OF PIMCO FUNDS]
<PAGE>
PIMCO Funds Prospectus
PIMCO This Prospectus describes three actively managed mutual fund
Funds: Portfolios offered by PIMCO Funds: Multi-Manager Series.
Multi-
Manager
Series
Asset Allocation Series -- 90/10 Portfolio
Asset Allocation Series -- 60/40 Portfolio
November Asset Allocation Series -- 30/70 Portfolio
1, 2000
Each Portfolio invests in a diversified portfolio of other PIMCO
Funds. This Prospectus explains what you should know about the
Portfolios before you invest. Please read it carefully.
Share
Classes
A, B
and C
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information................................................ 3
Portfolio Summaries
90/10 Portfolio.................................................. 5
60/40 Portfolio.................................................. 8
30/70 Portfolio.................................................. 11
Summary of Principal Risks......................................... 14
Investment Objectives and Principal Investment Strategies.......... 20
Underlying Funds................................................... 23
Other Risk Information............................................. 26
Management of the Portfolios....................................... 27
Investment Options - Class A, B and C Shares ...................... 29
How Portfolio Shares Are Priced.................................... 32
How to Buy and Sell Shares......................................... 32
Portfolio Distributions............................................ 36
Tax Consequences................................................... 37
Financial Highlights............................................... 39
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The Portfolios are intended for investors who prefer to have their
asset allocation decisions made by professional money managers.
Each Portfolio has a distinct investment objective which it seeks
to achieve by investing within specified equity and fixed income
targets and ranges among certain Funds in the PIMCO Funds family.
The Portfolios invest only in Funds in the PIMCO Funds family. The
PIMCO Funds in which the Portfolios invest are called Underlying
Funds or Funds in this Prospectus.
Some of the Underlying Funds invest primarily in equity
securities and are called Underlying Stock Funds. Other Underlying
Funds invest primarily in fixed income securities, including money
market instruments, and are called Underlying Bond Funds. The
Portfolios are named according to their equity/fixed income
allocation targets. For instance, the 90/10 Portfolio will
normally invest approximately 90% of its assets in Underlying
Stock Funds and 10% of its assets in Underlying Bond Funds.
The table below lists the investment objectives and compares the
asset allocation strategies of the Portfolios. Other important
characteristics are described in the individual Portfolio
Summaries beginning on page 5, and are discussed in greater detail
under "Investment Objectives and Principal Investment Strategies."
A "Summary of Principal Risks" begins on page 14.
<TABLE>
<CAPTION>
PIMCO Funds
Asset Allocation Series Investment Objective Allocation Strategy
----------------------------------------------------------------------
<C> <C> <S>
90/10 Portfolio Long-term capital Under normal conditions,
appreciation approximately 90% (range
of 80%-100%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 10% (range of 0%-
20%) among Underlying
Bond Funds
----------------------------------------------------------------------
60/40 Portfolio Long-term capital Under normal conditions,
appreciation and approximately 60% (range
current income of 50%-70%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 40% (range of 30%-
50%) among Underlying
Bond Funds
----------------------------------------------------------------------
30/70 Portfolio Current income, with Under normal conditions,
long-term approximately 30% (range
capital appreciation as of 25%-35%) of the
a Portfolio's assets will
secondary objective be allocated among
Underlying Stock Funds
and 70% (range of 65%-
75%) among Underlying
Bond Funds
</TABLE>
Risk/Return You should choose among the Portfolios based on personal
Comparison investment objectives, investment time horizon, tolerance for risk
and personal financial circumstances. Generally speaking,
historical data suggests that the longer the time horizon, the
greater the likelihood that the total return of a portfolio that
invests primarily in equity securities will be higher than the
total return of a portfolio that invests primarily in fixed income
securities. However, an equity portfolio is generally subject to
higher levels of overall risk and price volatility than a fixed
income portfolio and is considered to be a more aggressive
investment. Based on these assumptions, the following chart gives
some indication of the comparative risk/return potential of the
Portfolios according to their equity/fixed income allocation
targets and ranges. Note that these assumptions may not be correct
in future market conditions and the chart may not accurately
predict the actual comparative risk/return of the Portfolios under
all market conditions.
90/10 Portfolio might be suitable if you have a relatively
long time horizon, seek long-term capital appreciation
potential and have a fairly high tolerance for risk and
volatility.
60/40 Portfolio might be suitable if you have a medium-
range time horizon, seek a balance of long-term capital
appreciation potential and income and have medium tolerance
for risk and volatility.
30/70 Portfolio might be suitable if you have a shorter
time horizon, seek a higher level of income combined with
some potential for long-term capital appreciation and have
a lower tolerance for risk and volatility.
It is possible to lose money on investments in the Portfolios.
While each Portfolio provides a relatively high level of
diversification in comparison to most mutual funds, a single
Portfolio may not be suitable as a complete investment program.
The fact that a Portfolio may have had good performance in the
past (for example, during the year ended 1999) is no assurance
that the value of the Fund's investments will not decline in the
future or appreciate at a slower rate. An investment in a
Portfolio is not a deposit of a bank and is not guaranteed or
insured by the Federal Deposit Insurance Corporation or any other
government agency.
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
Asset PIMCO Advisors L.P. serves as the investment adviser to the
Allocation Portfolios. PIMCO Advisors selects the Underlying Funds in which
Strategies the Portfolios may invest. PIMCO Advisors' Asset Allocation
Committee determines how each Portfolio allocates and reallocates
its assets among the Underlying Funds selected by PIMCO Advisors
according to the Portfolio's equity/fixed income allocation
targets and ranges. The Committee attempts to diversify each
Portfolio's assets broadly among the major asset classes and sub-
classes represented by the Underlying Funds.
The major equity asset classes and sub-classes held by the
Underlying Stock Funds include those categorized by investment
style/category (growth, blend, value, enhanced index, sector-
related), region (U.S. equities, international developed markets,
international emerging markets), and market capitalization (large-
cap, mid-cap and small-cap). The major fixed income asset classes
and sub-classes held by the Underlying Bond Funds include those
categorized by sector/investment specialty (government securities,
mortgage-related securities, corporate bonds and inflation-indexed
bonds), region (U.S. fixed income, developed foreign fixed income,
emerging markets fixed income), credit quality (investment
grade/money market, medium grade, high yield), and duration (long-
term, intermediate-term and short-term).
Please see "Underlying Funds" in this Prospectus for a
description of the Underlying Funds as categorized by their
investment styles and main investments.
The Portfolios may invest in any or all of the Underlying Funds,
but will not normally invest in every Underlying Fund at any
particular time. Each Portfolio may invest in shares of the same
Underlying Funds; however, the percentage of each Portfolio's
assets so invested will vary depending on the Portfolio's
investment objective. The Asset Allocation Committee does not
allocate a Portfolio's assets according to a predetermined blend
of particular Underlying Funds. Instead, the Committee meets
regularly to determine the mix of Underlying Funds appropriate for
each Portfolio by allocating among the asset classes and sub-
classes held by the Underlying Funds. When making these decisions,
the Committee considers various quantitative and qualitative data
relating to the U.S. and foreign economies and securities markets.
This data includes projected growth trends in the U.S. and foreign
economies, forecasts for interest rates and the relationship
between short- and long-term interest rates (yield curve), current
and projected trends in inflation, relative valuation levels in
the equity and fixed income markets and various segments within
those markets, the outlook and projected growth of various
industrial sectors, information relating to business cycles,
borrowing trends and the cost of capital, political trends, data
relating to trade balances and labor information. The Committee
may also consider proprietary research provided by the investment
advisers and sub-advisers of the Underlying Funds.
The Committee then allocates each Portfolio's assets among the
Underlying Funds selected by PIMCO Advisors to fill out the asset
class and sub-class weightings it has identified according to the
Portfolio's equity/fixed income targets and ranges. The Committee
has the flexibility to reallocate each Portfolio's assets in
varying percentages among any or all of the Underlying Funds
selected by PIMCO Advisors based on the Committee's ongoing
analyses of the equity and fixed income markets, although these
tactical shifts are not expected to be large or frequent in
nature.
"Fund of The term "fund of funds" is used to describe mutual funds, such as
Funds" the Portfolios, that pursue their investment objectives by
Structure investing in other mutual funds. Your cost of investing in a
and Portfolio will generally be higher than the cost of investing in a
Expenses mutual fund that invests directly in individual stocks and bonds.
By investing in a Portfolio, you will indirectly bear fees and
expenses charged by the Underlying Funds in which the Portfolio
invests in addition to the Portfolio's direct fees and expenses.
In addition, the use of a fund of funds structure could affect the
timing, amount and character of distributions to you and therefore
may increase the amount of taxes payable by you.
Portfolio The following Portfolio Summaries identify each Portfolio's
Descriptionsinvestment objective, principal investments and strategies,
and Fees principal risks, performance information and fees and expenses. A
more detailed "Summary of Principal Risks" describing principal
risks of investing in the Portfolios begins after the Portfolio
Summaries. A fuller discussion of the Portfolios' investment
strategies and related information is included under "Investment
Objectives and Principal Investment Strategies" in this
Prospectus.
Prospectus 4
<PAGE>
90/10 Portfolio
--------------------------------------------------------------------------------
Principal Investment
Investments Objective
and Allocation
Strategies Strategy Target Range
Seeks long-term Underlying Stock
capital Funds 90% 80%-100%
appreciation Underlying Bond
Funds 10% 0%-20%
Dividend
Frequency
At least annually
The Portfolio seeks to achieve its investment objective by
normally investing approximately 90% (within a range of 80%-100%)
of its assets in Underlying Stock Funds and approximately 10%
(within a range of 0%-20%) of its assets in Underlying Bond Funds.
The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a relatively
long time horizon who seeks long-term capital appreciation
potential and has a fairly high tolerance for risk and volatility.
--------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions and/or PIMCO Advisors' selection of Underlying Funds
will not produce the desired results, and therefore the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, your investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Derivatives Risk .Interest Rate Risk
.Issuer Risk .Foreign Investment Risk
.Credit Risk
.Value Securities Risk .Emerging Markets Risk
.High Yield Risk
.Growth Securities Risk.Currency Risk .Mortgage Risk
.Smaller Company Risk .Focused Investment Risk
.Management Risk
.Liquidity Risk .Leveraging Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
90/10 Portfolio (continued)
--------------------------------------------------------------------------------
Performance Shown below is summary performance information for the Portfolio
Information in a bar chart and an Average Annual Total Returns table. The
information provides some indication of the risks of investing in
the Portfolio by showing changes in its performance from year to
year and by showing how the Portfolio's average annual returns
compare with the returns of broad-based securities market indices
and an index of mutual funds. The bar chart and the information to
its right show performance of the Portfolio's Class A shares, but
the returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
Past performance is no guarantee of future results.
Calendar Year Total Returns -- Class A
More Recent
Return
Information
1/1/00-9/30/00
4.52%
Highest and
Lowest Quarter
Returns
(for periods
shown in the bar
chart)
------------------
Highest (10/1/99-
12/31/99)
14.32%
------------------
Lowest (7/1/99-
9/30/99)
-3.86%
[GRAPH] Calendar Year End (through 12/31)
'99 19.00%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Portfolio Inception
1 Year (9/30/98)(/4/)
-----------------------------------------------------------------
Class A 12.50% 22.17%
-----------------------------------------------------------------
Class B 13.13% 23.89%
-----------------------------------------------------------------
Class C 17.02% 26.82%
-----------------------------------------------------------------
Russell 3000 Index(/1/) 20.89% 35.92%
-----------------------------------------------------------------
Lipper Multi-Cap Core Funds Average(/2/) 20.63% 35.90%
-----------------------------------------------------------------
Blended Index(/3/) 20.54% 33.44%
-----------------------------------------------------------------
</TABLE>
(1) The Russell 3000 Index is an unmanaged index of the 3,000
largest U.S. companies based on total market capitalization.
It is not possible to invest directly in the index.
(2) The Lipper Multi-Cap Core Funds Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest in companies with a variety of
capitalization ranges, without concentrating in any one market
capitalization range over an extended period of time. It does
not take into account sales charges.
(3) The Blended Index represents the blended performance of a
hypothetical index developed by PIMCO Advisors made up of 72%
Russell 3000 Index, 18% MSCI All Country World ex-U.S. Index
and 10% Lehman Brothers Aggregate Bond Index. The Russell 3000
Index is described above. The MSCI All Country World ex-U.S.
Index is an unmanaged index of stocks representing both
developed and emerging markets but excluding the United
States. The Lehman Brothers Aggregate Bond Index is an
unmanaged index of investment grade, U.S. dollar-denominated
fixed income securities of domestic issuers having a maturity
greater than one year. It is not possible to invest directly
in these indices.
(4) The Portfolio began operations on 9/30/98. Index comparisons
begin on 9/30/98.
Prospectus 6
<PAGE>
90/10 Portfolio (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Portfolio:
of the
Portfolio
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<S> <C> <C>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees(/1/) Fees(/2/) Fund Expenses(/3/) Expenses
------------------------------------------------------------------------------------------
Class A None 0.25% 0.40% 0.78% 1.43%
------------------------------------------------------------------------------------------
Class B None 1.00 0.40 0.78 2.18
------------------------------------------------------------------------------------------
Class C None 1.00 0.40 0.78 2.18
------------------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) The Administrative Fees are subject to a reduction of 0.05% on
average net assets attributable in the aggregate to the
Portfolio's Class A, B and C shares in excess of $2.5 billion.
(3) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Portfolio with the
costs of investing in other mutual funds. The Examples assume that
you invest $10,000 in the noted class of shares for the time
periods indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
Class A $688 $978 $1,289 $2,169 $688 $978 $1,289 $2,169
-----------------------------------------------------------------------------------------------------------
Class B 721 982 1,369 2,228 221 682 1,169 2,228
-----------------------------------------------------------------------------------------------------------
Class C 321 682 1,169 2,513 221 682 1,169 2,513
-----------------------------------------------------------------------------------------------------------
</TABLE>
7 PIMCO Funds: Multi-Manager Series
<PAGE>
60/40 Portfolio
--------------------------------------------------------------------------------
Principal Investment
Investments Objective
and
Strategies Seeks long-term
capital Allocation
appreciation and Strategy Target Range
current income
Underlying Stock
Dividend Funds 60% 50%-70%
Frequency Underlying Bond
Quarterly Funds 40% 30%-50%
The Portfolio seeks to achieve its investment objective by
normally investing approximately 60% (within a range of 50%-70%)
of its assets in Underlying Stock Funds and approximately 40%
(within a range of 30%-50%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a medium-range
time horizon who seeks a balance of long-term capital appreciation
potential and income and has a medium tolerance for risk and
volatility.
--------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions and/or PIMCO Advisors' selection of Underlying Funds
will not produce the desired results, and therefore the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, your investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Credit Risk .Emerging Markets
.Issuer Risk .High Yield Risk Risk
.Value Securities Risk .Mortgage Risk .Currency Risk
.Growth Securities Risk.Liquidity Risk .Focused Investment
.Smaller Company Risk .Derivatives Risk Risk
.Interest Rate Risk .Leveraging Risk
.Foreign Investment
Risk .Management Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
Prospectus 8
<PAGE>
60/40 Portfolio (continued)
--------------------------------------------------------------------------------
Performance Shown below is summary performance information for the Portfolio
Information in a bar chart and an Average Annual Total Returns table. The
information provides some indication of the risks of investing in
the Portfolio by showing changes in its performance from year to
year and by showing how the Portfolio's average annual returns
compare with the returns of broad-based securities market indices
and an index of mutual funds. The bar chart and the information to
its right show performance of the Portfolio's Class A shares, but
the returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
Past performance is no guarantee of future results.
Calendar Year Total Returns -- Class A
More Recent Return
Information
1/1/00-9/30/00
5.18%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
-------------------
Highest (10/1/99-
12/31/99)
9.40%
-------------------
Lowest (7/1/99-
9/30/99)
-2.40%
[GRAPH] Calendar Year End (through 12/31)
'99 12.03%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Portfolio Inception
1 Year (9/30/98)(/5/)
------------------------------------------------------------------
Class A 5.87% 13.02%
------------------------------------------------------------------
Class B 6.10% 14.25%
------------------------------------------------------------------
Class C 10.13% 17.35%
------------------------------------------------------------------
Russell 3000 Index(/1/) 20.89% 35.92%
------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(/2/) -0.82% -0.39%
------------------------------------------------------------------
Lipper Balanced Fund Average(/3/) 8.79% 16.57%
------------------------------------------------------------------
Blended Index(/4/) 13.12% 21.30%
------------------------------------------------------------------
</TABLE>
(1) The Russell 3000 Index is an unmanaged index of the 3,000
largest U.S. companies based on total market capitalization.
It is not possible to invest directly in the index.
(2) The Lehman Brothers Aggregate Bond Index is an unmanaged
index of investment grade, U.S. dollar-denominated fixed
income securities of domestic issuers having a maturity
greater than one year. It is not possible to invest directly
in the index.
(3) The Lipper Balanced Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. whose primary objective is to conserve
principal by maintaining at all times a balanced portfolio of
both stocks and bonds. It does not take into account sales
charges.
(4) The Blended Index represents the blended performance of a
hypothetical index developed by PIMCO Advisors made up of 48%
Russell 3000 Index, 12% MSCI All Country World ex-U.S. Index
and 40% Lehman Brothers Aggregate Bond Index. The Russell
3000 Index and Lehman Brothers Aggregate Bond Index are
described above. The MSCI All Country World ex-U.S. Index is
an unmanaged index of stocks representing both developed and
emerging markets but excluding the United States. It is not
possible to invest directly in these indices.
(5) The Portfolio began operations on 9/30/98. Index comparisons
begin on 9/30/98.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
60/40 Portfolio (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class A, B or C shares of the Portfolio:
of the
Portfolio
Shareholder Fees (fees paid directly from your investment)
<TABLE>
<S> <C> <C>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares
are purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees(/1/) Fees(/2/) Fund Expenses(/3/) Expenses
------------------------------------------------------------------------------------------
Class A None 0.25% 0.40% 0.67% 1.32%
------------------------------------------------------------------------------------------
Class B None 1.00 0.40 0.67 2.07
------------------------------------------------------------------------------------------
Class C None 1.00 0.40 0.67 2.07
------------------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) The Administrative Fees are subject to a reduction of 0.05% on
average net assets attributable in the aggregate to the
Portfolio's Class A, B and C shares in excess of $2.5 billion.
(3) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Portfolio with the
costs of investing in other mutual funds. The Examples assume that
you invest $10,000 in the noted class of shares for the time
periods indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
Class A $677 $945 $1,234 $2,053 $677 $945 $1,234 $2,053
-----------------------------------------------------------------------------------------------------------
Class B 710 949 1,314 2,112 210 649 1,114 2,112
-----------------------------------------------------------------------------------------------------------
Class C 310 649 1,114 2,400 210 649 1,114 2,400
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
30/70 Portfolio
--------------------------------------------------------------------------------
Principal Investment
Investments Objective
and Seeks current Allocation
Strategies income, with Strategy Target Range
long-term capital
appreciation as a Underlying Stock
secondary Funds 30% 25%-35%
objective Underlying Bond
Funds 70% 65%-75%
Dividend
Frequency
Monthly
The Portfolio seeks to achieve its investment objective by
normally investing approximately 30% (within a range of 25%-35%)
of its assets in Underlying Stock Funds and approximately 70%
(within a range of 65%-75%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a shorter time
horizon who seeks a higher level of income combined with some
potential for long-term capital appreciation and has a lower
tolerance for risk and volatility.
--------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions and/or PIMCO Advisors' selection of Underlying Funds
will not produce the desired results, and therefore the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, your investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Interest Rate Risk .Value Securities Risk .Emerging Markets
.Credit Risk .Growth Securities Risk Risk
.High Yield Risk .Smaller Company Risk .Currency Risk
.Mortgage Risk .Liquidity Risk .Focused Investment
.Market Risk .Derivatives Risk Risk
.Issuer Risk .Foreign Investment Risk.Leveraging Risk
.Management Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
30/70 Portfolio (continued)
--------------------------------------------------------------------------------
Performance Shown below is summary performance information for the Portfolio
Information in a bar chart and an Average Annual Total Returns table. The
information provides some indication of the risks of investing in
the Portfolio by showing changes in its performance from year to
year and by showing how the Portfolio's average annual returns
compare with the returns of broad-based securities market indices
and an index of mutual funds. The bar chart and the information to
its right show performance of the Portfolio's Class A shares, but
the returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
Past performance is no guarantee of future results.
Calendar Year Total Returns -- Class A
<TABLE>
<S> <C>
More Recent Return
Information
1/1/00-9/30/00 5.78%
Highest and Lowest
Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (10/1/99-
12/31/99)
4.74%
--------------------
Lowest (1/1/99-
3/31/99)
-1.43%
</TABLE>
[GRAPH] Calendar Year End (through 12/31)
'99 4.64%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Portfolio Inception
1 Year (9/30/98)(/4/)
-------------------------------------------------------------------
Class A -0.07% 4.73%
-------------------------------------------------------------------
Class B -1.10% 4.66%
-------------------------------------------------------------------
Class C 2.91% 7.82%
-------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(/1/) -0.82% -0.39%
-------------------------------------------------------------------
Lipper General Bond Fund Average(/2/) 1.17% 2.88%
-------------------------------------------------------------------
Blended Index(/3/) 6.00% 10.04%
-------------------------------------------------------------------
</TABLE>
(1) The Lehman Brothers Aggregate Bond Index is an unmanaged
index of investment grade, U.S. dollar-denominated fixed
income securities of domestic issuers having a maturity
greater than one year. It is not possible to invest directly
in the index.
(2) The Lipper General Bond Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that intend to keep most of their assets in
corporate and government debt issues and do not have any
quality or maturity restrictions. It does not take into
account sales charges.
(3) The Blended Index represents the blended performance of a
hypothetical index developed by PIMCO Advisors made up of 24%
Russell 3000 Index, 6% MSCI All Country World ex-U.S. Index
and 70% Lehman Brothers Aggregate Bond Index. The Russell
3000 Index is an unmanaged index of the 3,000 largest U.S.
companies based on total market capitalization. The MSCI All
Country World ex-U.S. Index is an unmanaged index of stocks
representing both developed and emerging markets but
excluding the United States. The Lehman Brothers Aggregate
Bond Index is described above. It is not possible to invest
directly in these indices.
(4) The Portfolio began operations on 9/30/98. Index comparisons
begin on 9/30/98.
Prospectus 12
<PAGE>
30/70 Portfolio (continued)
--------------------------------------------------------------------------------
These tables describe the fees and expenses you may pay if you buy
and hold Class A, B or C shares of the Portfolio:
Fees and Shareholder Fees (fees paid directly from your investment)
Expenses
of the
Portfolio
<TABLE>
<S> <C> <C>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
Class A 4.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares
are purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees(/1/) Fees(/2/) Fund Expenses(/3/) Expenses
------------------------------------------------------------------------------------------
Class A None 0.25% 0.40% 0.56% 1.21%
------------------------------------------------------------------------------------------
Class B None 1.00 0.40 0.56 1.96
------------------------------------------------------------------------------------------
Class C None 1.00 0.40 0.56 1.96
------------------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and
Class C shares, a Class B or Class C shareholders may,
depending upon the length of time the shares are held, pay
more than the economic equivalent of the maximum front-end
sales charges permitted by relevant rules of the National
Association of Securities Dealers, Inc.
(2) The Administrative Fees are subject to a reduction of 0.05%
on average net assets attributable in the aggregate to the
Portfolio's Class A, B, and C shares in excess of $2.5
billion.
(3) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated
based upon a recent allocation of the Portfolio's assets
among Underlying Funds and upon the total annual operating
expenses of Institutional Class shares of these Underlying
Funds. For a listing of the expenses associated with each
Underlying Fund, please see "Management of the Portfolios--
Underlying Fund Expenses." Total Annual Portfolio Operating
Expenses and the Examples set forth below are based on
estimates of the Underlying Fund Expenses the Portfolio will
incur. Actual Underlying Fund Expenses for the Portfolio are
expected to vary with changes in the allocation of the
Portfolio's assets, and may be higher or lower than those
shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Portfolio with the
costs of investing in other mutual funds. The Examples assume that
you invest $10,000 in the noted class of shares for the time
periods indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
Class A $568 $817 $1,085 $1,850 $568 $817 $1,085 $1,850
-----------------------------------------------------------------------------------------------------------
Class B 699 915 1,257 1,995 199 615 1,057 1,995
-----------------------------------------------------------------------------------------------------------
Class C 299 615 1,057 2,285 199 615 1,057 2,285
-----------------------------------------------------------------------------------------------------------
</TABLE>
13 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary of Principal Risks
The value of your investment in a Portfolio changes with the
values of that Portfolio's investments in the Underlying Funds.
Many factors can affect those values. The factors that are most
likely to have a material effect on a particular Portfolio's
investments as a whole are called "principal risks." The principal
risks of each Portfolio are identified in the Portfolio Summaries
beginning on page 5 and are summarized in this section. There is
no guarantee that a Portfolio will be able to achieve its
investment objective.
Allocation Risk
Each Portfolio's investment performance depends upon how its
assets are allocated and reallocated among particular Underlying
Funds according to the Portfolio's equity/fixed income allocation
targets and ranges. A principal risk of investing in each
Portfolio is that PIMCO Advisors' Asset Allocation Committee will
make less than optimal or poor asset allocation decisions and/or
that PIMCO Advisors will make less than optimal decisions in
selecting the Underlying Funds in which the Portfolios invest. The
Committee attempts to identify asset classes and sub-classes
represented by the Underlying Funds that will provide consistent,
quality performance for the Portfolios, but there is no guarantee
that the Committee's allocation techniques will produce the
desired results. It is possible that the Committee and/or PIMCO
Advisors will focus on Underlying Funds that perform poorly or
underperform other available Funds under various market
conditions. You could lose money on your investment in a Portfolio
as a result of these allocation decisions.
Underlying Fund Risks
Because each Portfolio invests all of its assets in Underlying
Funds, the risks associated with investing in the Portfolios are
closely related to the risks associated with the securities and
other investments held by the Underlying Funds. The ability of a
Portfolio to achieve its investment objective will depend upon the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved.
Each Portfolio's net asset value will fluctuate in response to
changes in the net asset values of the Underlying Funds in which
it invests. The extent to which the investment performance and
risks associated with a particular Portfolio correlate to those of
a particular Underlying Fund will depend upon the extent to which
the Portfolio's assets are allocated from time to time for
investment in the Underlying Fund, which will vary. A Portfolio's
investment in a particular Underlying Fund may and in some cases
is expected to exceed 25% of its assets. To the extent that a
Portfolio invests a significant portion of its assets in an
Underlying Fund, it will be particularly sensitive to the risks
associated with that Fund.
The following summarizes principal risks associated with
investments in the Underlying Funds and, indirectly, with your
investment in a Portfolio. Each Underlying Fund may be subject to
additional principal risks other than those described below
because the types of investments made by an Underlying Fund can
change over time. The summary is not intended to be exhaustive.
For a more complete description of these risks and the securities
and investment techniques used by the Underlying Funds, please
refer to the Statement of Additional Information and the
Underlying Fund prospectuses, which are incorporated herein by
reference and are available free of charge by telephoning the
Distributor at 1-800-426-0107.
Market The market price of securities owned by an Underlying Fund may go
Risk up or down, sometimes rapidly or unpredictably. Securities may
decline in value due to factors affecting securities markets
generally or particular industries represented in the securities
markets. The value of a security may decline due to general market
conditions which are not specifically related to a particular
company, such as real or perceived adverse economic conditions,
changes in the general outlook for corporate earnings, changes in
interest or currency rates, or adverse investor sentiment
generally. They may also decline due to factors which affect a
particular industry or industries, such as labor shortages or
increased production costs and competitive conditions within an
industry. Equity securities generally have greater price
volatility than fixed income securities and the Underlying Stock
Funds are particularly sensitive to these market risks.
Issuer
Risk
The value of a security may also decline for a number of reasons
which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
Prospectus 14
<PAGE>
Value Each Underlying Stock Fund may invest in companies that may not be
Securities expected to experience significant earnings growth, but whose
Risk securities the Fund's portfolio manager believes are selling at a
price lower than their true value. PIMCO Equity Income,
Renaissance, Value, Small-Cap Value, Capital Appreciation, Mid-Cap
and Micro-Cap Funds and PIMCO Allianz Select International Fund
place particular emphasis on value securities. Companies that
issue value securities may have experienced adverse business
developments or may be subject to special risks that have caused
their securities to be out of favor. If a portfolio manager's
assessment of a company's prospects is wrong, or if the market
does not recognize the value of the company, the price of its
securities may decline or may not approach the value that the
portfolio manager anticipates.
Growth Each Underlying Stock Fund may invest in equity securities of
Securities companies that its portfolio manager believes will experience
Risk relatively rapid earnings growth. PIMCO Growth, Target,
Opportunity, Capital Appreciation, Mid-Cap, Micro-Cap and
Innovation Funds and PIMCO Allianz Select International Fund place
particular emphasis on growth securities. Growth securities
typically trade at higher multiples of current earnings than other
securities. Therefore, the values of growth securities may be more
sensitive to changes in current or expected earnings than the
values of other securities.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk market capitalizations that are small compared to other publicly
traded companies. These companies may have limited product lines,
markets or financial resources or they may depend on a few key
employees. Securities of smaller companies may trade less
frequently and in lesser volume than more widely held securities
and their values may fluctuate more sharply than other securities.
They may also trade in the over-the-counter market or on a
regional exchange, or may otherwise have limited liquidity. PIMCO
Opportunity, Micro-Cap, Small-Cap Value and Innovation Funds
generally have substantial exposure to this risk. PIMCO Target and
Mid-Cap Funds and PIMCO Allianz Select International Fund also
have significant exposure to this risk because they invest
substantial assets in companies with medium-sized market
capitalizations, which are smaller and generally less-seasoned
than the largest companies. Smaller company risk also applies to
fixed income securities issued by smaller companies and may affect
certain investments of the Underlying Bond Funds.
Liquidity Many of the Underlying Funds are subject to liquidity risk.
Risk Liquidity risk exists when particular investments are difficult to
purchase or sell, possibly preventing a Fund from selling out of
these illiquid securities at an advantageous time or price.
Underlying Funds with principal investment strategies that involve
securities of companies with smaller market capitalizations,
foreign securities, derivatives or securities with substantial
market and/or credit risk tend to have the greatest exposure to
liquidity risk.
Derivatives
Risk Many of the Underlying Funds may, but are not required to, use a
number of derivative instruments for risk management purposes or
as part of their investment strategies. Generally, derivatives are
financial contracts whose value depends upon, or is derived from,
the value of an underlying asset, reference rate or index, and may
relate to stocks, bonds, interest rates, currencies or currency
exchange rates, commodities, and related indexes. Examples of
derivative instruments include options contracts, futures
contracts, options on futures contracts and swap agreements. An
Underlying Fund's use of derivative instruments involves risks
different from, or possibly greater than, the risks associated
with investing directly in securities and other traditional
investments. Also, an Underlying Fund's portfolio manager may
decide not to employ any of these strategies and there is no
assurance that any derivatives strategy used by a Fund will
succeed.
A description of the various derivative instruments in which the
Underlying Funds may invest and the risks associated with each
instrument is included in the Underlying Fund prospectuses and in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Underlying Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
Liquidity Risk Liquidity risk exists when a particular
derivative instrument is difficult to purchase or sell. If a
derivative transaction is particularly large or if the relevant
market is illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When an Underlying Fund uses
derivatives for leverage, investments in that Fund will tend to be
more volatile, resulting in larger gains or losses in response to
market changes. To limit leveraging risk, the Underlying Funds
observe asset segregation requirements to cover their obligations
under derivative instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that an
Underlying Fund will engage in derivatives transactions at any
time or from time to time. A Fund's ability to use derivatives may
also be limited by certain regulatory considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the general risk that the market value
of the instrument will change in a way detrimental to an
Underlying Fund's interest. If a portfolio manager incorrectly
forecasts the values of securities, currencies or interest rates
or other economic factors in using derivatives for an Underlying
Fund, the Fund might have been in a better position if it had not
entered into the transaction at all. While some strategies
involving derivative instruments can reduce the risk of loss, they
can also reduce the opportunity for gain or even result in losses
by offsetting favorable price movements in other investments of an
Underlying Fund. An Underlying Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to an Underlying Fund. Also, the
value of derivatives may not correlate perfectly, or at all, with
the value of the assets, reference rates or indexes they are
designed to closely track. In addition, an Underlying Fund's use
of derivatives may also cause the Fund to realize higher amounts
of short-term capital gains (taxed at ordinary income tax rates
when distributed to shareholders who are individuals) than if the
Fund had not used such instruments.
Foreign Many Underlying Funds (in particular, PIMCO International,
(non- Structured Emerging Markets, Tax-Efficient Structured Emerging
U.S.) Markets, Global Bond, Foreign Bond and Emerging Markets Bond Funds
Investment and PIMCO Allianz Select International Fund) invest in securities
Risk of foreign issuers, securities traded principally in securities
markets outside the United States and/or securities denominated in
foreign currencies (together, "foreign securities"). These Funds
may experience more rapid and extreme changes in value than Funds
that invest exclusively in securities of U.S. issuers or
securities that trade exclusively in U.S. markets.
The securities markets of many foreign countries are relatively
small, with a limited number of companies representing a small
number of industries. Foreign securities often trade with less
frequency and volume than domestic securities and therefore may
exhibit greater price volatility. Additionally, issuers of foreign
securities are usually not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting and auditing
standards of foreign countries differ, in some cases
significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely
affect an Underlying Fund's investments in a foreign country. In
the event of nationalization, expropriation or other confiscation,
a Fund could lose its entire investment in foreign securities. To
the extent that an Underlying Fund invests a significant portion
of its assets in a narrowly defined geographic area such as
Eastern Europe, South Africa or Asia, the Fund will generally have
more exposure to regional economic risks associated with foreign
investments. Adverse conditions in certain regions (such as
Southeast Asia) can also adversely affect securities of other
countries whose economies appear to be unrelated. In addition,
special U.S. tax considerations may apply to an Underlying Fund's
investment in foreign securities.
Prospectus 16
<PAGE>
Certain Underlying Bond Funds may invest in sovereign debt
issued by governments, their agencies or instrumentalities, or
other government-related entities. Holders of sovereign debt may
be requested to participate in the rescheduling of such debt and
to extend further loans to governmental entities. In addition,
there is no bankruptcy proceeding by which defaulted sovereign
debt may be collected.
Emerging Certain Underlying Funds (in particular, PIMCO Structured Emerging
Markets Markets, Tax-Efficient Structured Emerging Markets and Emerging
Risk Markets Bond Funds) may invest in the securities of issuers based
in countries with developing or "emerging market" economies. These
securities may present market, credit, currency, liquidity, legal,
political and other risks different from, or greater than, the
risks of investing in developed foreign countries.
Currency Many Underlying Funds may invest directly in foreign currencies or
Risk in securities that trade in, or receive revenues in, foreign
currencies. To the extent that they do so, these Funds are subject
to the risk that those currencies will decline in value relative
to the U.S. dollar, or, in the case of hedging positions, that the
U.S. Dollar will decline in value relative to the currency being
hedged. PIMCO Global Bond, Foreign Bond, Emerging Markets Bond,
International, Structured Emerging Markets and Tax-Efficient
Structured Emerging Markets Funds and PIMCO Allianz Select
International Fund are particularly sensitive to currency risk.
Currency rates in foreign countries may fluctuate significantly
over short periods of time for a number of reasons, including
changes in interest rates, intervention (or the failure to
intervene) by U.S. or foreign governments, central banks or
supranational entities such as the International Monetary Fund, or
by the imposition of currency controls or other political
developments in the U.S. or abroad. For example, uncertainty
surrounds the introduction of the euro (a common currency unit for
the European Union) and its effect on the value of European
currencies as well as securities denominated in local European
currencies. These and other currencies in which Underlying Fund
assets are denominated may be devalued against the U.S. dollar,
resulting in a loss to such Funds.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies increases risk. PIMCO Global Bond, Foreign
Risk Bond and Emerging Markets Bond Funds are "non-diversified," which
means that they invest in a smaller number of issuers than
diversified mutual funds. Other Underlying Funds also normally
invest in a relatively small number of issuers. In addition, many
Underlying Bond Funds may invest a substantial portion of their
assets in the bonds of similar projects or from issuers in the
same state. To the extent that they focus their investments, the
Underlying Funds 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
Underlying Fund's net asset value. Some of those investments also
may present substantial credit or other risks. PIMCO
International, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets, Global Bond, Foreign Bond and
Emerging Markets Bond Funds and PIMCO Allianz Select International
Fund may be subject to increased risk to the extent they focus
their assets in securities denominated in a particular foreign
currency or in a narrowly defined geographic area outside the
U.S., because companies in these areas may share common
characteristics and are often subject to similar business risks
and regulatory burdens, and their securities may react similarly
to economic, market, political or other developments. Similarly,
PIMCO Innovation Fund is vulnerable to events affecting companies
which use innovative technologies to gain a strategic, competitive
advantage in their industry and companies that provide and service
those technologies because it normally concentrates its
investments in those companies. Also, the Underlying Funds may
from time to time have greater risk to the extent they invest a
substantial portion of their assets in companies in related
industries such as "technology" or "financial and business
services," which may share common characteristics, are often
subject to similar business risks and regulatory burdens, and
whose securities may react similarly to economic, market,
political or other developments.
Although each Portfolio normally invests in a number of different
Underlying Funds, to the extent that a Portfolio concentrates a
significant portion of its assets in a single Underlying Fund, it
will be particularly sensitive to the risks associated with that
Fund and any investments in which that Fund concentrates.
Leveraging Leverage, including borrowing, will cause the value of an
Risk Underlying Fund's shares to be more volatile that if the Fund did
not use leverage. This is because leverage tends to exaggerate the
effect of any increase or decrease in the value of a Fund's
portfolio securities. Certain Underlying 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,
17 PIMCO Funds: Multi-Manager Series
<PAGE>
the investment of collateral from loans of portfolio securities,
or the use of when-issued, delayed-delivery or forward commitment
transactions. An Underlying Fund's use of derivatives may also
involve leverage. The use of leverage may also cause an Underlying
Fund to liquidate portfolio positions when it may not be
advantageous to do so in order to satisfy its obligations or to
meet segregation requirements.
Interest All of the Underlying Funds that invest in fixed income
Rate Risk securities, and particularly the Underlying Bond Funds, are
subject to interest rate risk. Changes in the market values of
fixed income securities are largely a function of changes in the
current level of interest rates. The value of an Underlying Fund's
investments in fixed income securities will typically change as
the level of interest rates fluctuate. During periods of declining
interest rates, the value of fixed income securities generally
rise. Conversely, during periods of rising interest rates, the
value of fixed income securities generally decline.
"Duration" is one measure of the expected life of a fixed income
security that is used to determine the sensitivity of a security's
price to changes in interest rates. Securities with longer
durations tend to be more sensitive to changes in interest rates,
usually making them more volatile than securities with shorter
durations. Accordingly, Underlying Bond Funds with longer average
portfolio durations (e.g., PIMCO Long-Term U.S. Government Fund)
will generally be more sensitive to changes in interest rates than
Funds with shorter average portfolio durations (e.g., PIMCO Money
Market, Short-Term and Low Duration Funds). Also, some portfolios
(e.g., those with mortgage-backed and other prepayable securities)
have changing durations and may have increasing durations
precisely when that is least advantageous (i.e., when interest
rates are rising).
Many Underlying Funds, including most of the Underlying Bond
Funds, may invest in securities that are particularly sensitive to
fluctuations in prevailing interest rates and have relatively high
levels of interest rate risk. These include various mortgage-
related securities (for instance, the interest-only or "IO" class
of a stripped mortgage-backed security) and "zero coupon"
securities (fixed income securities, including certain U.S.
Government securities, that do not make periodic interest payments
and are purchased at a discount from their value at maturity).
Credit All of the Underlying Funds are subject to credit risk. This is
Risk the risk that the issuer or the guarantor of a fixed income
security, or the counterparty to a derivatives contract,
repurchase agreement or a loan of portfolio securities, will be
unable or unwilling to make timely principal and/or interest
payments, or to otherwise honor its obligations. Securities are
subject to varying degrees of credit risk, which are often
reflecting in credit ratings provided by rating agencies such as
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's
Ratings Services ("S&P").
The Underlying Funds that invest in fixed income securities
(particularly the Underlying Bond Funds) are subject to varying
degrees of risk that the issuers of the securities will have their
credit ratings downgraded or will default, potentially reducing
the Underlying Fund's share price and income level. Nearly all
fixed income securities are subject to some credit risk, whether
the issuers of the securities are corporations, states and local
governments or foreign governments. Even certain U.S. Government
securities are subject to credit risk.
High High yield securities (commonly known as "junk bonds") are fixed
Yield income securities rated lower than Baa by Moody's or BBB by S&P,
Risk or unrated securities determined to be of comparable quality.
Underlying Bond Funds which invest in high yield securities (in
particular, PIMCO High Yield and Emerging Markets Bond Funds) may
be subject to greater levels of interest rate, credit and
liquidity risk than Funds that invest exclusively in higher
quality fixed income securities (e.g., PIMCO Money Market and
Long-Term U.S. Government Funds). These securities are considered
predominately speculative with respect to the issuer's continuing
ability to make principal and interest payments (credit risk).
These securities may also be more susceptible to real or perceived
adverse economic and competitive industry conditions than higher
quality fixed income securities. An economic downturn or period of
rising interest rates could adversely affect the market for these
securities and reduce an Underlying Bond Fund's ability to sell
them (liquidity risk).
Mortgage Most of the Underlying Bond Funds may invest in mortgage-related
Risk securities. Rising interest rates tend to extend the duration of
mortgage-related securities, making them more sensitive to changes
in interest rates. As a result, in a period of rising interest
rates, an Underlying Fund that holds mortgage-related securities
may exhibit additional volatility. This is sometimes referred to
as extension risk. In addition, mortgage-related securities may
involve special risks relating to unanticipated rates of
prepayment on the mortgages underlying the securities. This is
sometimes referred to as prepayment
Prospectus 18
<PAGE>
risk. Declining interest rates may tend to increase prepayments,
and these prepayments would have to be reinvested at the then-
prevailing lower interest rates. Therefore, an Underlying Fund
that holds mortgage-related securities may have less potential for
capital appreciation during periods of declining interest rates
than Funds that invest in other types of fixed income securities
of similar maturities.
Management
Risk Each Underlying Fund is subject to management risk because it is
an actively managed investment portfolio. PIMCO Advisors, Pacific
Investment Management Company LLC ("Pacific Investment Management
Company"), and the sub-advisers and individual portfolio managers
of the Underlying Funds will apply investment techniques and risk
analyses in making investment decisions for the Funds, but there
can be no guarantee that they will produce the desired results.
A Note on Each Portfolio may invest in PIMCO StocksPLUS Fund. While the
PIMCO investment objective of that Fund is to achieve a total return
StocksPLUS which exceeds the total return performance of the S&P 500 Index,
Fund it does so by investing substantially all of its assets in a
combination of equity-based (S&P 500 Index) derivative
instruments, backed by a portfolio of fixed income securities.
Consequently, the risks of investing in the Fund include
derivatives risk and the risks generally associated with the
Underlying Bond Funds. To the extent that the Fund invests in S&P
500 Index derivatives backed by a portfolio of fixed income
securities, under certain conditions, generally in a market where
the value of both S&P 500 Index derivatives and fixed income
securities are declining, the Fund may experience greater losses
than would be the case if it were to invest directly in a
portfolio of S&P 500 Index stocks.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
Investment Objectives and Principal Investment Strategies
The investment objective and principal investment strategies of
each Portfolio are described below. There can be no assurance that
the investment objective of any Portfolio will be achieved.
Because the market value of each Portfolio's investments will
change, the net asset value per share of each Portfolio will also
vary.
The Portfolios are intended for investors who prefer to have
their asset allocation decisions made by professional money
managers. Each Portfolio seeks to achieve its investment objective
by investing within specified equity and fixed income ranges among
the Underlying Funds. Each Underlying Fund is a series of the
Trust or PIMCO Funds: Pacific Investment Management Series and is
managed by PIMCO Advisors and/or its affiliates.
Portfolio 90/10 Portfolio seeks long-term capital appreciation. Under normal
Descriptionsconditions, approximately 90% of the Portfolio's assets will be
allocated among Underlying Stock Funds and 10% among Underlying
Bond Funds.
60/40 Portfolio seeks long-term capital appreciation and current
income. Under normal conditions, approximately 60% of the
Portfolio's assets will be allocated among Underlying Stock Funds
and 40% among Underlying Bond Funds.
30/70 Portfolio seeks current income. Long-term capital
appreciation is a secondary objective. Under normal conditions,
approximately 30% of the Portfolio's assets will be allocated
among Underlying Stock Funds and 70% among Underlying Bond Funds.
PIMCO Advisors serves as the investment adviser to the Portfolios
and selects the Underlying Funds in which the Portfolios may
invest. PIMCO Advisors' Asset Allocation Committee determines how
each Portfolio allocates and reallocates its assets among the
Underlying Funds selected by PIMCO Advisors according to the
Portfolio's equity/fixed income allocation targets and ranges.
Please see "Asset Allocation Strategies" in the Summary
Information section above for a description of the allocation
strategies and techniques used by the Committee. The table below
illustrates the equity and fixed income allocation targets and
typical ranges for each Portfolio under normal market conditions.
Equity and Fixed Income Targets and Ranges
(as a percentage of each Portfolio's total investments)
<TABLE>
<CAPTION>
Typical
PIMCO Funds Target Allocation
Asset Allocation Series Allocation Range
--------------------------------------------------------
<S> <C> <C>
90/10 Portfolio
Equity--Underlying Stock Funds 90% 80% - 100%
Fixed Income--Underlying Bond Funds* 10% 0% - 20%
--------------------------------------------------------
60/40 Portfolio
Equity--Underlying Stock Funds 60% 50% - 70%
Fixed Income--Underlying Bond Funds* 40% 30% - 50%
--------------------------------------------------------
30/70 Portfolio
Equity--Underlying Stock Funds 30% 25% - 35%
Fixed Income--Underlying Bond Funds* 70% 65% - 75%
</TABLE>
* The Fixed Income portion may include a money market component
through investments in PIMCO Money Market Fund.
Prospectus 20
<PAGE>
Each Portfolio invests all of its assets in Underlying Funds and
may invest in any or all of the Funds. However, it is expected
that a Portfolio will invest in only some of the Underlying Funds
at any particular time. A Portfolio's investment in a particular
Underlying Fund may exceed 25% of the Portfolio's total assets. To
the extent that a Portfolio invests a significant portion of its
assets in an Underlying Fund, it will be particularly sensitive to
the risks associated with that Fund. The particular Underlying
Funds in which each Portfolio may invest, the equity and fixed
income allocation targets and ranges specified above, and the
percentage of each Portfolio's assets invested from time to time
in any Underlying Fund or combination of Funds may be changed from
time to time without the approval of the Portfolio's shareholders.
Each Portfolio is also subject to certain investment restrictions
that are described under "Investment Restrictions" in the
Statement of Additional Information.
Equity The equity portion of each Portfolio will be allocated among a
Portion number of Underlying Stock Funds which represent a broad range of
of the equity-based asset classes and sub-classes and a variety of
Portfolios investment objectives and strategies. By allocating assets among
these Funds, the equity portions of the Portfolios can be
diversified in multiple ways, including the following:
By Investment Style/Category
.Growth
.Blend (Broad Market)
.Value
.Enhanced Index
.Sector-Related
By Region
.U.S. Equities
.International Developed Markets Equities
.International Emerging Markets Equities
By Size
.Large-Cap
.Mid-Cap
.Small-Cap
For a description of the Underlying Stock Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Fixed The fixed income portion of each Portfolio will be allocated among
Income a number of Underlying Bond Funds which represent a broad range of
Portion fixed income-based asset classes and sub-classes and a variety of
of the investment objectives and strategies. By allocating assets among
Portfolios these Funds, the fixed income portions of the Portfolios can be
diversified in multiple ways, including the following:
By Sector/Investment Specialty
.Governments
.Mortgages
.Corporate
.Inflation-Indexed
By Region
.U.S. Fixed Income
.Developed Foreign Fixed Income
.Emerging Markets Fixed Income
By Credit Quality
.Investment Grade/Money Market
.Medium Grade
.High Yield
By Duration
.Long-Term
.Intermediate-Term
.Short-Term
21 PIMCO Funds: Multi-Manager Series
<PAGE>
For a description of the Underlying Bond Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Temporary In response to unfavorable market and other conditions, each
Defensive Portfolio may invest up to 100% of its assets in PIMCO Money
Strategies Market Fund (and may deviate from its asset allocation range) for
temporary defensive purposes. A Portfolio may also borrow money
for temporary or emergency purposes. These temporary strategies
would be inconsistent with the Portfolio's investment objective
and principal investment strategies and may adversely affect the
Portfolio's ability to achieve its investment objective.
Portfolio A change in the securities held by a Portfolio is known as
Turnover "portfolio turnover." Because PIMCO Advisors does not expect to
reallocate the Portfolios' assets among the Underlying Funds on a
frequent basis, the portfolio turnover rates for the Portfolios
are expected to be modest (i.e., less than 25%) in comparison to
most mutual funds. However, the Portfolios' indirectly bear the
expenses associated with portfolio turnover of the Underlying
Funds, a number of which have fairly high portfolio turnover rates
(i.e., in excess of 100%). High portfolio turnover involves
correspondingly greater expenses to an Underlying Fund, including
brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other
securities. Shareholders in the Portfolios may also bear expenses
directly or indirectly through sales of securities held by the
Portfolios and the Underlying Funds which result in realization of
taxable capital gains. To the extent such gains relate to
securities held for twelve months or less, such gains will be
short-term capital gains taxed at ordinary income tax rates when
distributed to shareholders who are individuals. The trading costs
and tax effects associated with portfolio turnover may adversely
affect a Portfolio's performance and the return to shareholders.
Changes The investment objective, equity/fixed income allocation targets
in and ranges, and, unless otherwise noted, other investment policies
Investment of each Portfolio described in this Prospectus may be changed by
Objectives the Board of Trustees without shareholder approval. If there is a
and change in a Portfolio's investment objective, allocation target or
Policies range, or other investment policies, shareholders should consider
whether the Portfolio remains an appropriate investment in light
of their then current financial positions and needs.
Prospectus 22
<PAGE>
Underlying Funds
Each Portfolio invests all of its assets in Underlying Funds.
Accordingly, each Portfolio's investment performance depends upon
a favorable allocation among the Underlying Funds as well as the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved. Shares of the Underlying Funds
are not offered in this Prospectus.
Advisory PIMCO Advisors serves as investment adviser for each of the
ArrangementsUnderlying Stock Funds, except that its affiliate, Pacific
for the Investment Management Company, is the sole investment adviser to
Underlying PIMCO StocksPLUS Fund. The PIMCO Equity Advisors division of PIMCO
Funds Advisors manages the investments of several of the Underlying
Stock Funds. PIMCO Advisors retains sub-advisory firms to manage
the portfolios of other Underlying Stock Funds. These firms
include PIMCO/Allianz International Advisors LLC, Cadence Capital
Management, NFJ Investment Group and Parametric Portfolio
Associates, each of which is an affiliate of PIMCO Advisors, and
Blairlogie Capital Management, which is not an affiliate. Pacific
Investment Management Company is the sole investment adviser to
each of the Underlying Bond Funds. For a complete description of
the advisory and sub-advisory arrangements for the Underlying
Funds, please see the Statement of Additional Information and the
Underlying Fund prospectuses, which are incorporated herein by
reference and are available free of charge by telephoning the
Distributor at 1-800-426-0107.
Underlying The following provides a concise description of the investment
Stock objective, main investments and other information about each
Funds Underlying Stock Fund. For a complete description of these Funds,
please see the Underlying Fund prospectuses, which are
incorporated herein by reference and are available free of charge
by telephoning the Distributor at 1-800-426-0107.
<TABLE>
<CAPTION>
Approximate Approximate
PIMCO Investment Main Number of Capitalization
Fund Objective Investments Holdings Range
----------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Growth Stock Growth Long-term growth of Common stocks of 35-40 At least $5 billion
Funds capital; companies with market
income is an capitalizations of at
incidental least $5 billion
consideration
--------------------------------------------------------------------------------------------------------
Target Capital appreciation; Common stocks of 40-60 Between $1 billion
no companies with market and $10 billion
consideration is capitalizations of
given to income between $1 billion and
$10 billion
--------------------------------------------------------------------------------------------------------
Opportunity Capital appreciation; Common stocks of 60-100 Between $100 million
no companies with market and $2 billion
consideration is capitalizations of
given to income between $100 million and
$2 billion
----------------------------------------------------------------------------------------------------------------------
Blend Stock Capital Appreciation Growth of capital Common stocks of 60-100 At least $1 billion
Funds companies with market
capitalizations of at
least $1 billion that
have improving
fundamentals and whose
stock is reasonably
valued by the market
--------------------------------------------------------------------------------------------------------
Mid-Cap Growth of capital Common stocks of 60-100 More than $500 million
companies with market (excluding the
capitalizations of more largest 200
than $500 million companies)
(excluding the largest
200 companies) that have
improving fundamentals
and whose stock is
reasonably valued by the
market
--------------------------------------------------------------------------------------------------------
Micro-Cap Long-term growth of Common stocks of 60-100 Less than
capital companies with market $250 million
capitalizations of less
than $250 million that
have improving
fundamentals and whose
stock is reasonably
valued by the market
</TABLE>
23 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Approximate Approximate
PIMCO Investment Main Number of Capitalization
Fund Objective Investments Holdings Range
---------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Value Stock Equity Income Current income as a Income-producing common 40-50 More than $2 billion
Funds primary objective; stocks of companies
long-term growth of with market
capital is a capitalizations of more
secondary objective than $2 billion
-----------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of Common stocks of 50-80 All capitalizations
capital companies with below-
and income average valuations
whose business
fundamentals are
expected to improve
-----------------------------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of 40 More than $5 billion
capital companies with market
and income capitalizations of more
than $5 billion and
below average
valuations whose
business fundmentals
are expected to improve
-----------------------------------------------------------------------------------------------------------
Small-Cap Value Long-term growth of Common stocks of 100 Between $100 million
capital companies with market and $1.5 billion
and income capitalizations of
between $100 million
and $1.5 billion and
below-average price-to-
earnings ratios
relative to the market
and their industry
groups
---------------------------------------------------------------------------------------------------------------------------
Enhanced Index Tax-Efficient Equity Maximum after-tax A broadly diversified More than More than $5 billion
Stock Funds growth of capital portfolio of at least 200
200 common stocks of
companies represented
in the S&P 500 Index
with market
capitalizations of more
than $5 billion
-----------------------------------------------------------------------------------------------------------
Enhanced Equity A total return which Common stocks 100-200 At least $5 billion
equals or exceeds the represented in the S&P
total return 500 Index with market
performance of an capitalizations of more
index (currently the than $5 billion
S&P 500 Index) that
represents the
performance of a
reasonably broad
spectrum of common
stocks that are
publicly traded in
the U.S.
-----------------------------------------------------------------------------------------------------------
StocksPLUS Total return that S&P 500 stock index N/A N/A
exceeds that derivatives backed by a
of the S&P 500 Index portfolio of short-term
fixed income securities
---------------------------------------------------------------------------------------------------------------------------
International International Capital appreciation Common stocks of 200-250 More than $500 million
Stock Funds through investment in foreign (non-U.S.)
an international issuers (developed and
portfolio; income is emerging markets)
an incidental with market
consideration capitalizations of more
than $500 million
-----------------------------------------------------------------------------------------------------------
Allianz Select Capital appreciation Common stocks of 30-60 More than $1 billion
International companies located
outside of the United
States with market
capitalizations of more
than $1 billion
-----------------------------------------------------------------------------------------------------------
Structured Emerging Long-term growth of Common stocks of More than All
Markets capital companies located in, 300 capitalizations
or whose principal
business operations are
based in, emerging
markets
-----------------------------------------------------------------------------------------------------------
Tax-Efficient Structured Long-term growth of Common stocks of More than All
Emerging Markets capital. The Fund companies located in, 300 capitalizations
also seeks to achieve or whose principal
higher after-tax business operations are
returns for its based in, emerging
shareholders by using markets
a variety of tax-
efficient management
strategies
---------------------------------------------------------------------------------------------------------------------------
Sector-Related Innovation Capital appreciation; Common stocks of 40 More than $200 million
Stock Funds no technology-related
consideration is companies with market
given to income capitalizations of more
than $200 million
</TABLE>
Prospectus 24
<PAGE>
Underlying The investment objective of each Underlying Bond Fund (except as
Bond provided below) is to seek to realize maximum total return,
Funds consistent with preservation of capital and prudent investment
management. The "total return" sought by most of the Underlying
Bond Funds will consist of income earned on the Fund's
investments, plus capital appreciation, if any, which generally
arises from decreases in interest rates or improving credit
fundamentals for a particular sector or security. The investment
objective of PIMCO Real Return Bond Fund is to seek to realize
maximum real return, consistent with preservation of real capital
and prudent investment management. "Real return" is a measure of
the change in purchasing power of money invested in a particular
investment after adjusting for inflation. The investment objective
of each of PIMCO Money Market Fund and PIMCO Short-Term Fund is to
seek to obtain maximum current income, consistent with
preservation of capital and daily liquidity. PIMCO Money Market
Fund also attempts to maintain a stable net asset value of $1.00
per share, although there can be no assurance that it will be
successful in doing so.
The following provides a concise description of the main
investments of and other information relating to each Underlying
Bond Fund. For a complete description of these Funds, please see
the Underlying Fund prospectus for PIMCO Funds: Pacific Investment
Management Series, which is incorporated herein by reference and
is available free of charge by telephoning the Distributor at
1-800-426-0107.
<TABLE>
<CAPTION>
PIMCO Fund Main Investments Duration Credit Quality(/1/)
-----------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C>
Short Money Market Money market instruments (less than or =)90 days dollar- Min 95% Aaa or Prime 1;
Duration Bond weighted (less than or =)5% Aa or Prime 2
Funds average maturity
---------------------------------------------------------------------------------------------
Short-Term Money market instruments 0-1 yr B to Aaa; max 10%
and below Baa
short maturity
fixed income
securities
---------------------------------------------------------------------------------------------
Low Duration Short maturity 1-3 yrs B to Aaa; max 10%
fixed income below Baa
securities
-----------------------------------------------------------------------------------------------------------
Intermediate Moderate Duration Short and 2-5 yrs B to Aaa; max 10%
Duration intermediate below Baa
Bond Funds maturity
fixed income
securities
---------------------------------------------------------------------------------------------
Total Return Intermediate 3-6 yrs B to Aaa; max 10%
maturity fixed below Baa
income
securities
---------------------------------------------------------------------------------------------
Total Return II Intermediate 3-6 yrs Baa to Aaa
maturity fixed
income
securities with
quality
and non-U.S.
issuer
restrictions
-----------------------------------------------------------------------------------------------------------
Long Duration Long-Term U.S. Long-term (greater than or =)8 yrs A to Aaa
Bond Funds Government maturity fixed
income
securities
-----------------------------------------------------------------------------------------------------------
International Global Bond U.S. and non- 3-7 yrs B to Aaa; max 10%
Bond Funds U.S. below Baa
intermediate
maturity fixed
income
securities
---------------------------------------------------------------------------------------------
Foreign Bond Intermediate 3-7 yrs B to Aaa; max 10%
maturity hedged below Baa
non-U.S. fixed
income
securities
---------------------------------------------------------------------------------------------
Emerging Markets Emerging market 0-8 yrs B to Aaa
Bond fixed income
securities
-----------------------------------------------------------------------------------------------------------
High Yield High Yield Higher yielding 2-6 yrs B to Aaa; min 65%
Bond Funds fixed income below Baa
securities
-----------------------------------------------------------------------------------------------------------
Inflation Real Return Bond Inflation- N/A B to Aaa; max 10%
Indexed Bond indexed fixed below Baa
Funds income
securities
<CAPTION>
Non-U.S. Dollar
Denominated
Securities(/2/)
-----------------------------------------------------------------------------------------------------------
<C>
0%
---------------------------------------------------------------------------------------------
0-5%
---------------------------------------------------------------------------------------------
0-20%
-----------------------------------------------------------------------------------------------------------
0-20%
---------------------------------------------------------------------------------------------
0-20%
---------------------------------------------------------------------------------------------
0%
-----------------------------------------------------------------------------------------------------------
0%
-----------------------------------------------------------------------------------------------------------
25-75%
---------------------------------------------------------------------------------------------
(greater than or =)85%
---------------------------------------------------------------------------------------------
(greater than or =)80%
-----------------------------------------------------------------------------------------------------------
0-15%
-----------------------------------------------------------------------------------------------------------
0-20%
</TABLE>
1. As rated by Moody's Investors Service, Inc., or equivalently
rated by Standard & Poor's Rating Services, or if unrated, de-
termined by Pacific Investment Management Company to be of com-
parable quality.
2. Percentage limitations relate to non-U.S. dollar-denominated
securities for all Underlying Bond Funds except PIMCO Global
Bond, Foreign Bond and Emerging Markets Bond Funds. Percentage
limitations for these three Funds relate to securities of non-
U.S. issuers, denominated in any currency. For the PIMCO High
Yield Fund, the percentage limitation relates to euro-denomi-
nated securities. Each Underlying Bond Fund (except PIMCO Total
Return II and Long-Term U.S. Government Funds) may invest beyond
these limits in U.S. dollar-denominated securities of non-U.S.
issuers.
Each Underlying Bond Fund invests at least 65% of its assets in
the following types of securities, which, unless provided above,
may be issued by domestic or foreign entities and denominated in
U.S. dollars or foreign currencies: securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities ("U.S. Government securities"); corporate debt
securities, including convertible securities and corporate
commercial paper; mortgage-backed and other asset-backed
securities; inflation-indexed bonds issued by both governments and
corporations; structured notes, including hybrid or "indexed"
securities, event-linked bonds and loan participations; delayed
funding loans and revolving
25 PIMCO Funds: Multi-Manager Series
<PAGE>
credit facilities; bank certificates of deposit, fixed time
deposits and bankers' acceptances; repurchase agreements and
reverse repurchase agreements; debt securities issued by states or
local governments and their agencies, authorities and other
government-sponsored enterprises; obligations of non-U.S.
governments or their subdivisions, agencies and government-
sponsored enterprises; and obligations of international agencies
or supranational entities.
Other In addition to purchasing the securities listed above under "Main
Investment Investments," some or all of the Underlying Funds may to varying
Practices extents: lend portfolio securities; enter into repurchase
of the agreements and reverse repurchase agreements; purchase and sell
Underlying securities on a when-issued or delayed delivery basis; enter into
Funds forward commitments to purchase securities; purchase and write
call and put options on securities and securities indexes; enter
into futures contracts, options on futures contracts and swap
agreements; invest in foreign securities; and buy or sell foreign
currencies and enter into forward foreign currency contracts.
These and the other types of securities and investment techniques
used by the Underlying Funds all have attendant risks. The
Portfolios are indirectly subject to some or all of these risks to
varying degrees because they invest all of their assets in the
Underlying Funds. For further information concerning the
investment practices of and risks associated with the Underlying
Funds, please see "Investment Objectives and Policies" in the
Statement of Additional Information and the Underlying Fund
prospectuses, which are incorporated herein by reference and are
available free of charge by telephoning the Distributor at 1-800-
426-0107.
Additional In addition to the Funds listed above, a Portfolio may invest in
Underlying additional Underlying Funds, including those that may become
Funds available for investment in the future, at the discretion of PIMCO
Advisors and without shareholder approval.
Other Risk Information
Potential PIMCO Advisors has broad discretion to allocate and reallocate the
Conflicts Portfolios' assets among the Underlying Funds consistent with the
of Portfolios' investment objectives and policies and asset
Interest allocation targets and ranges. Although PIMCO Advisors does not
charge an investment advisory fee for its asset allocation
services, PIMCO Advisors and its affiliates indirectly receive
fees (including investment advisory and administrative fees) from
the Underlying Funds in which the Portfolios invest. In this
regard, PIMCO Advisors has a financial incentive to invest a
Portfolio's assets in Underlying Funds with higher fees than other
Funds, even if it believes that alternate investments would better
serve the Portfolio's investment program. PIMCO Advisors is
legally obligated to disregard that incentive in making asset
allocation decisions for the Portfolios. The Trustees and officers
of the Trust may also have conflicting interests in fulfilling
their fiduciary duties to both the Portfolios and the Underlying
Funds of the Trust.
Prospectus 26
<PAGE>
Management of the Portfolios
Investment PIMCO Advisors serves as the investment adviser and the
Adviser administrator (serving in its capacity as administrator, the
and "Administrator") for the Portfolios. Subject to the supervision of
Admini- the Board of Trustees, PIMCO Advisors is responsible for managing,
strator either directly or through others selected by it, the investment
activities of the Portfolios and the Portfolios' business affairs
and other administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of September 30, 2000, PIMCO Advisors and its subsidiary
partnerships had approximately $272 billion in assets under
management.
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Portfolios in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may retain
other affiliates to provide certain of these services.
Asset PIMCO Advisors selects the Underlying Funds in which the
Allocation Portfolios may invest. PIMCO Advisors' Asset Allocation Committee
Committee is responsible for determining how the Portfolios' assets are
allocated and reallocated from time-to-time among the Underlying
Funds selected by PIMCO Advisors. The following provides
information about the individuals who comprise the Asset
Allocation Committee and are primarily responsible for making
asset allocation and other investment decisions for the
Portfolios.
<TABLE>
<CAPTION>
Asset Allocation
Committee Member Since Recent Professional Experience
----------------------------------------------------------------------------------------------
<C> <C> <S>
Udo Frank May, 2000 Managing Director and Chief Investment Officer of Allianz Asset
Advisory and Management GmbH, responsible for the entire investment
area (since 1997), and Chief Executive Officer and Chief Investment
Officer of Allianz PIMCO Asset Management. Previously, he served as
the Chief Investment Officer of Allianz KAG since 1994.
Kenneth W. May, 2000 Managing Director and Chief Investment Officer of the PIMCO Equity
Corba Advisors Division of PIMCO 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 & Farnham Inc. from 1984 to 1995,
serving in various capacities including as Director of the Capital
Management Group, Senior Vice President and Portfolio Manager.
Colin Glinsman May, 2000 Chief Investment Officer of Oppenheimer Capital since 1999.
Previously, he served as a portfolio manager and research analyst
at Oppenheimer Capital from 1989 to 1999.
John Hague May, 2000 Managing Director of Pacific Investment Management Company LLC,
where he is a member of the Executive Committee and a senior member
of the Portfolio Management and Investment Strategy Groups. He
joined Pacific Investment Management Company LLC in 1987.
John Loftus May, 2000 Managing Director of Pacific Investment Management Company LLC,
where he is a senior member of its Investment Strategy Group. He
also heads the firm's product management area. He joined Pacific
Investment Management Company LLC in 1986.
</TABLE>
Advisory The Portfolios do not pay any fees to PIMCO Advisors under the
Fees Trust's investment advisory agreement in return for the advisory
and asset allocation services provided by PIMCO Advisors. The
Portfolios do, however, indirectly pay their proportionate share
of the advisory fees paid to PIMCO Advisors and Pacific Investment
Management Company by the Underlying Funds in which the Portfolios
invest. See "Underlying Fund Expenses" below.
Administrative
Fees
Each Portfolio pays for the administrative services it requires
under a fee structure which is essentially fixed. Class A, Class B
and Class C shareholders of each Portfolio pay an administrative
fee to PIMCO Advisors, computed as a percentage of the Portfolio's
assets attributable in the aggregate to those classes of shares.
PIMCO Advisors, in turn, provides or procures administrative
services for Class A, Class B and Class C shareholders and also
bears the costs of most third-party services required by the
Portfolios, including audit, custodial, portfolio accounting,
legal, transfer agency and printing costs. The Portfolios do bear
other expenses which are not covered under the administrative fee
which may vary and affect the total level of expenses paid by
Class A, Class B and Class C shareholders, such as brokerage fees,
commissions and other transaction expenses, costs of borrowing
money, including interest expenses, and fees and expenses of the
Trust's disinterested Trustees.
Each Portfolio pays monthly administrative fees to PIMCO
Advisors at an annual rate of 0.40% based on the average daily net
assets attributable in the aggregate to the Portfolio's Class A,
Class B
27 PIMCO Funds: Multi-Manager Series
<PAGE>
and Class C shares up to $2.5 billion, and 0.35% based on such
average daily net assets in excess of $2.5 billion. The Portfolios
also indirectly pay their proportionate share of the
administrative fees charged by PIMCO Advisors and Pacific
Investment Management Company to the Underlying Funds in which the
Portfolios invest. See "Underlying Fund Expenses" below.
Underlying The expenses associated with investing in a "fund of funds," such
Fund as the Portfolios, are generally higher than those for mutual
Expenses funds that do not invest primarily in other mutual funds. This is
because shareholders in a "fund of funds" indirectly pay a portion
of the fees and expenses charged at the underlying fund level.
The Portfolios are structured in the following ways to lessen
the impact of expenses incurred at the Underlying Fund level:
. The Portfolios do not pay any fees for asset allocation or
advisory services under the Trust's investment advisory
agreement.
. The Underlying Funds invest in Institutional Class shares of the
Underlying Funds, which are not subject to any sales charges or
12b-1 fees.
The following table summarizes the annual expenses borne by
Institutional Class shareholders of the Underlying Funds (based on
estimates for the current fiscal year). Because the Portfolios
invest in Institutional Class shares of the Underlying Funds,
shareholders of each Portfolio indirectly bear a proportionate
share of these expenses, depending upon how the Portfolio's assets
are allocated from time to time among the Underlying Funds. See
"Fees and Expenses of the Portfolio" in each Portfolio Summary
above.
<TABLE>
<CAPTION>
Annual Underlying Fund Expenses
(Based on the average daily net assets
attributable to a Fund's Institutional Class
shares):
Advisory Admini- Other Total Fund
Underlying Fund Fees strative Fees Expenses Operating Expenses
-----------------------------------------------------------------------
<S> <C> <C> <C> <C>
PIMCO Growth 0.50% 0.25% 0.02% 0.77%
-----------------------------------------------------------------------
PIMCO Target 0.55 0.25 0.01 0.81
-----------------------------------------------------------------------
PIMCO Opportunity 0.65 0.25 0.01 0.91
-----------------------------------------------------------------------
PIMCO Capital
Appreciation 0.45 0.25 0.01 0.71
-----------------------------------------------------------------------
PIMCO Mid-Cap 0.45 0.25 0.01 0.71
-----------------------------------------------------------------------
PIMCO Micro-Cap 1.25 0.25 0.01 1.51
-----------------------------------------------------------------------
PIMCO Equity Income 0.45 0.25 0.02 0.72
-----------------------------------------------------------------------
PIMCO Renaissance 0.60 0.25 0.00 0.85
-----------------------------------------------------------------------
PIMCO Value 0.45 0.25 0.00 0.70
-----------------------------------------------------------------------
PIMCO Small-Cap Value 0.60 0.25 0.01 0.86
-----------------------------------------------------------------------
PIMCO Tax-Efficient
Equity 0.45 0.25 0.01 0.71
-----------------------------------------------------------------------
PIMCO Enhanced Equity 0.45 0.25 0.01 0.71
-----------------------------------------------------------------------
PIMCO StocksPLUS 0.40 0.25 0.00 0.65
-----------------------------------------------------------------------
PIMCO International 0.55 0.50 0.08 1.13
-----------------------------------------------------------------------
PIMCO Allianz Select
International 0.75 0.50 0.00 1.25
-----------------------------------------------------------------------
PIMCO Structured
Emerging Markets 0.45 0.50 0.29 1.24
-----------------------------------------------------------------------
PIMCO Tax-Efficient
Structured Emerging
Markets 0.45 0.50 0.05 1.00
-----------------------------------------------------------------------
PIMCO Innovation 0.65 0.25 0.00 0.90
-----------------------------------------------------------------------
PIMCO Money Market 0.15 0.20 0.00 0.35
-----------------------------------------------------------------------
PIMCO Short-Term 0.25 0.20 0.19 0.64
-----------------------------------------------------------------------
PIMCO Low Duration 0.25 0.18 0.08 0.51
-----------------------------------------------------------------------
PIMCO Moderate Duration 0.25 0.20 0.02 0.47
-----------------------------------------------------------------------
PIMCO Total Return 0.25 0.18 0.11 0.54
-----------------------------------------------------------------------
PIMCO Total Return II 0.25 0.25 0.00 0.50
-----------------------------------------------------------------------
PIMCO Long-Term U.S.
Government 0.25 0.25 0.07 0.57
-----------------------------------------------------------------------
PIMCO Global Bond 0.25 0.30 0.16 0.71
-----------------------------------------------------------------------
PIMCO Foreign Bond 0.25 0.25 0.19 0.69
-----------------------------------------------------------------------
PIMCO Emerging Markets
Bond 0.45 0.40 0.04 0.89
-----------------------------------------------------------------------
PIMCO High Yield 0.25 0.25 0.00 0.50
-----------------------------------------------------------------------
PIMCO Real Return Bond 0.25 0.25 0.03 0.53
</TABLE>
Prospectus 28
<PAGE>
Distributor The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stamford, CT 06902, is a broker-dealer
registered with the Securities and Exchange Commission.
Investment Options -- Class A, B and C Shares
The Trust offers investors Class A, Class B and Class C shares of
each Portfolio in this Prospectus. Each class of shares is subject
to different types and levels of sales charges than the other
classes and bears a different level of expenses.
The class of shares that is best for you depends upon a number of
factors, including the amount and the intended length of your
investment. The following summarizes key information about each
class to help you make your investment decision, including the
various expenses associated with each class. More extensive
information about the Trust's multi-class arrangements is included
in the PIMCO Funds Shareholders' Guide for Class A, B and C Shares
(the "Guide"), which is included as part of the Statement of
Additional Information and can be obtained free of charge from the
Distributor. See "How to Buy and Sell Shares--PIMCO Funds
Shareholders' Guide" below.
Class A . You pay an initial sales charge of up to 5.50% when you buy
Shares Class A shares. The sales charge is deducted from your
investment so that not all of your purchase payment is
invested.
. You may be eligible for a reduction or a complete waiver of
the initial sales charge under a number of circumstances. For
example, you normally pay no sales charge if you purchase
$1,000,000 or more of Class A shares. Please see the Guide for
details.
. Class A shares are subject to lower 12b-1 fees than Class B or
Class C shares. Therefore, Class A shareholders generally pay
lower annual expenses and receive higher dividends than Class
B or Class C shareholders.
. You normally pay no contingent deferred sales charge ("CDSC")
when you redeem Class A shares, although you may pay a 1% CDSC
if you purchase $1,000,000 or more of Class A shares (and
therefore pay no initial sales charge) and then redeem the
shares during the first 18 months after your initial purchase.
The Class A CDSC is waived for certain categories of investors
and does not apply if you are otherwise eligible to purchase
Class A shares without a sales charge. Please see the Guide
for details.
Class B . You do not pay an initial sales charge when you buy Class B
Shares shares. The full amount of your purchase payment is invested
initially.
. You normally pay a CDSC of up to 5% if you redeem Class B
shares during the first six years after your initial purchase.
The amount of the CDSC declines the longer you hold your Class
B shares. You pay no CDSC if you redeem during the seventh year
and thereafter. The Class B CDSC is waived for certain
categories of investors. Please see the Guide for details.
. Class B shares are subject to higher 12b-1 fees than Class A
shares for the first seven years they are held. During this
time, Class B shareholders normally pay higher annual expenses
and receive lower dividends than Class A shareholders.
. Class B shares automatically convert into Class A shares after
they have been held for seven years. After the conversion takes
place, the shares are subject to the lower 12b-1 fees paid by
Class A shares.
Class C . You do not pay an initial sales charge when you buy Class C
Shares shares. The full amount of your purchase payment is invested
initially.
. You normally pay a CDSC of 1% if you redeem Class C shares
during the first year after your initial purchase. The Class C
CDSC is waived for certain categories of investors. Please see
the Guide for details.
. Class C shares are subject to higher 12b-1 fees than Class A
shares. Therefore, Class C shareholders normally pay higher
annual expenses and receive lower dividends than Class A
shareholders.
. Class C shares do not convert into any other class of shares.
Because Class B shares convert into Class A shares after seven
years, Class C shares will normally be subject to higher
expenses and will pay lower dividends than Class B shares if
the shares are held for more than seven years.
29 PIMCO Funds: Multi-Manager Series
<PAGE>
The following provides additional information about the sales
charges and other expenses associated with Class A, Class B and
Class C shares.
--------------------------------------------------------------------------------
Initial Unless you are eligible for a waiver, the public offering price
Sales you pay when you buy Class A shares of the Portfolios is the net
Charges-- asset value ("NAV") of the shares plus an initial sales charge.
Class A The initial sales charge varies depending upon the size of your
Shares purchase, as set forth below. No sales charge is imposed where
Class A shares are issued to you pursuant to the automatic
reinvestment of income dividends or capital gains distributions.
90/10 Portfolio and 60/40 Portfolio
<TABLE>
<S> <C> <C>
Initial Sales Charge Initial Sales Charge
Amount of as % of Net as % of Public
Purchase Amount Invested Offering Price
---------------------------------------------------------------------
$0-$49,999 5.82% 5.50%
---------------------------------------------------------------------
$50,000-$99,999 4.71% 4.50%
---------------------------------------------------------------------
$100,000-$249,999 3.63% 3.50%
---------------------------------------------------------------------
$250,000-$499,999 2.56% 2.50%
---------------------------------------------------------------------
$500,000-$999,999 2.04% 2.00%
---------------------------------------------------------------------
$1,000,000 + 0.00%* 0.00%*
---------------------------------------------------------------------
</TABLE>
30/70 Portfolio
<TABLE>
<S> <C> <C>
Initial Sales Charge Initial Sales Charge
Amount of as % of Net as % of Public
Purchase Amount Invested Offering Price
---------------------------------------------------------------------
$0-$49,999 4.71% 4.50%
---------------------------------------------------------------------
$50,000-$99,999 4.17% 4.00%
---------------------------------------------------------------------
$100,000-$249,999 3.63% 3.50%
---------------------------------------------------------------------
$250,000-$499,999 2.56% 2.50%
---------------------------------------------------------------------
$500,000-$999,999 2.04% 2.00%
---------------------------------------------------------------------
$1,000,000 + 0.00%* 0.00%*
---------------------------------------------------------------------
</TABLE>
*As shown, investors that purchase $1,000,000 or more of any
Portfolio's Class A shares will not pay any initial sales charge
on the purchase. However, purchasers of $1,000,000 or more of
Class A shares may be subject to a CDSC of 1% if the shares are
redeemed during the first 18 months after their purchase. See
"CDSCs on Class A Shares" below.
--------------------------------------------------------------------------------
Contingent Unless you are eligible for a waiver, if you sell (redeem) your
Deferred Class B or Class C shares within the time periods specified below,
Sales you will pay a CDSC according to the following schedules.
Charges
(CDSCs)
-- Class
B and
Class C
Shares
Class B
Shares
<TABLE>
<S> <C>
Years Since Purchase Percentage Contingent
Payment was Made Deferred Sales Charge
-----------------------------------------------------------------------------
First 5
-----------------------------------------------------------------------------
Second 4
-----------------------------------------------------------------------------
Third 3
-----------------------------------------------------------------------------
Fourth 3
-----------------------------------------------------------------------------
Fifth 2
-----------------------------------------------------------------------------
Sixth 1
-----------------------------------------------------------------------------
Seventh 0*
-----------------------------------------------------------------------------
</TABLE>
*After the seventh year, Class B shares convert into Class A
shares.
Class C
Shares
<TABLE>
<CAPTION>
Years Since Purchase Percentage Contingent
Payment was Made Deferred Sales Charge
-----------------------------------------------------------------------------
<S> <C>
First 1
-----------------------------------------------------------------------------
Thereafter 0
-----------------------------------------------------------------------------
</TABLE>
Prospectus 30
<PAGE>
--------------------------------------------------------------------------------
CDSCs on Unless a waiver applies, investors who purchase $1,000,000 or more
Class A of Class A shares (and, thus, pay no initial sales charge) will be
Shares subject to a 1% CDSC if the shares are redeemed within 18 months
of their purchase. The Class A CDSC does not apply if you are
otherwise eligible to purchase Class A shares without an initial
sales charge or if you are eligible for a waiver of the CDSC. See
"Reductions and Waivers of Initial Sales Charges and CDSCs" below.
--------------------------------------------------------------------------------
How CDSCs A CDSC is imposed on redemptions of Class B and Class C shares
are (and where applicable, Class A shares) on the amount of the
Calculated redemption which causes the current value of your account for the
particular class of shares of a Portfolio to fall below the total
dollar amount of your purchase payments subject to the CDSC.
However, no CDSC is imposed if the shares redeemed have been
acquired through the reinvestment of dividends or capital gains
distributions or if the amount redeemed is derived from increases
in the value of your account above the amount of the purchase
payments subject to the CDSC. CDSCs are deducted from the proceeds
of your redemption, not from amounts remaining in your account. In
determining whether a CDSC is payable, it is assumed that the
purchase payment from which the redemption is made is the earliest
purchase payment for the particular class of shares in your
account (from which a redemption or exchange has not already been
effected).
For instance, the following example illustrates the operation of
the Class B CDSC:
. Assume that an individual opens an account and makes a
purchase payment of $10,000 for Class B shares of a Portfolio
and that six months later the value of the investor's account
for that Portfolio has grown through investment performance
and reinvestment of distributions to $11,000. The investor
then may redeem up to $1,000 from that Portfolio ($11,000
minus $10,000) without incurring a CDSC. If the investor
should redeem $3,000, a CDSC would be imposed on $2,000 of
the redemption (the amount by which the investor's account
for the Portfolio was reduced below the amount of the
purchase payment). At the rate of 5%, the Class B CDSC would
be $100.
In determining whether an amount is available for redemption
without incurring a CDSC, the purchase payments made for all
shares of a particular class of a Portfolio in the shareholder's
account are aggregated, and the current value of all such shares
is aggregated.
--------------------------------------------------------------------------------
Reductions The initial sales charges on Class A shares and the CDSCs on Class
and A, Class B and Class C shares may be reduced or waived under
Waivers certain purchase arrangements and for certain categories of
of investors. Please see the Guide for details. The Guide is
Initial available free of charge from the Distributor. See "How to Buy and
Sales Sell Shares--PIMCO Funds Shareholders' Guide" below.
Charges
and CDSCs
--------------------------------------------------------------------------------
DistributionThe Portfolios pay fees to the Distributor on an ongoing basis as
and compensation for the services the Distributor renders and the
Servicing expenses it bears in connection with the sale and distribution of
(12b-1) Portfolio shares ("distribution fees") and/or in connection with
Plans personal services rendered to Portfolio shareholders and the
maintenance of shareholder accounts ("servicing fees"). These
payments are made pursuant to Distribution and Servicing Plans
("12b-1 Plans") adopted by each Portfolio pursuant to Rule 12b-1
under the Investment Company Act of 1940.
There is a separate 12b-1 Plan for each class of shares offered
in this Prospectus. Class A shares pay only servicing fees. Class
B and Class C shares pay both distribution and servicing fees. The
following lists the maximum annual rates at which the distribution
and/or servicing fees may be paid under each 12b-1 Plan
(calculated as a percentage of each Portfolio's average daily net
assets attributable to the particular class of shares):
<TABLE>
<S> <C> <C>
Servicing Distribution
All Portfolios Fee Fee
--------------------------------------------------------------------------------
Class A 0.25% None
--------------------------------------------------------------------------------
Class B 0.25% 0.75%
--------------------------------------------------------------------------------
Class C 0.25% 0.75%
--------------------------------------------------------------------------------
</TABLE>
Because 12b-1 fees are paid out of a Portfolio's assets on an
ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than sales charges which are
deducted at the time of investment. Therefore, although Class B
and Class C shares do not pay initial sales charges, the
distribution fees payable on Class B and Class C shares may, over
time, cost you more than the initial sales charge imposed on Class
A shares. Also, because Class B shares convert into Class A shares
after they have been held for seven years and are not subject to
distribution fees after the conversion, an investment in Class C
shares may cost you more over time than an investment in Class B
shares.
31 PIMCO Funds: Multi-Manager Series
<PAGE>
How Portfolio Shares Are Priced
The net asset value ("NAV") of a Portfolio's Class A, Class B and
Class C shares is determined by dividing the total value of a
Portfolio's investments and other assets attributable to that
class, less any liabilities, by the total number of shares
outstanding of that class.
The assets of each Portfolio consist of shares of the Underlying
Funds, which are valued at their respective NAVs at the time of
valuation of the Portfolios' shares. For purposes of calculating
the NAV of Underlying Fund shares, portfolio securities and other
assets of the Funds for which market quotes are available are
stated at market value. Market value is generally determined on
the basis of last reported sales prices, or if no sales are
reported, based on quotes obtained from a quotation reporting
system, established market makers, or pricing services. Certain
securities or investments for which daily market quotes are not
readily available may be valued, pursuant to procedures
established by the Board of Trustees of the Underlying Fund, with
reference to other securities or indices. Short-term investments
having a maturity of 60 days or less are generally valued at
amortized cost. Exchange traded options, futures and options on
futures are valued at the settlement price determined by the
exchange. Other securities for which market quotes are not readily
available are valued at fair value as determined in good faith by
the Fund's Board of Trustees or persons acting at the Board's
direction.
Underlying Fund investments initially valued in currencies other
than the U.S. dollar are converted to U.S. dollars using exchange
rates obtained from pricing services. As a result, the NAV of an
Underlying Fund's shares may be affected by changes in the value
of currencies in relation to the U.S. dollar. The value of
securities traded in markets outside the United States or
denominated in currencies other than the U.S. dollar may be
affected significantly on a day that the New York Stock Exchange
is closed. As a result, to the extent that a Portfolio invests in
Underlying Funds that hold foreign securities, the NAV of the
Portfolio's shares may change at times when you can not purchase,
redeem or exchange shares.
Portfolio and Underlying Fund shares are valued at the close of
regular trading (normally 4:00 p.m., Eastern time) (the "NYSE
Close") on each day that the New York Stock Exchange is open. For
purposes of calculating the NAV, the Underlying Funds normally use
pricing data for domestic equity securities received shortly after
the NYSE Close and do not normally take into account trading,
clearances or settlements that take place after the NYSE Close.
Domestic fixed income and foreign securities are normally priced
using data reflecting the earlier closing of the principal markets
for those securities. Information that becomes known to the
Underlying Funds or their agents after the NAV has been calculated
on a particular day will not generally be used to retroactively
adjust the price of a security or the NAV determined earlier that
day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Underlying Funds may value securities at fair
value or estimate their value as determined in good faith by the
Fund's Board of Trustees or persons acting at their direction
pursuant to procedures approved by the Board of Trustees. Fair
valuation may also be used by the Underlying Fund's Board of
Trustees if extraordinary events occur after the close of the
relevant market but prior to the NYSE Close.
How to Buy and Sell Shares
The following section provides basic information about how to buy,
sell (redeem) and exchange shares of the Portfolios.
PIMCO More detailed information about the Trust's purchase, sale and
Funds exchange arrangements for Portfolio shares is provided in the
Share- PIMCO Funds Shareholders' Guide, which is included in the
holders' Statement of Additional Information and can be obtained free of
Guide charge from the Distributor by written request or by calling 1-
800-426-0107. The Guide provides technical information about the
basic arrangements described below and also describes special
purchase, sale and exchange features and programs offered by the
Trust, including:
. Automated telephone and wire transfer procedures
. Automatic purchase, exchange and withdrawal programs
. Programs that establish a link from your Portfolio account to
your bank account
. Special arrangements for tax-qualified retirement plans
. Investment programs which allow you to reduce or eliminate the
initial sales charges on Class A shares
. Categories of investors that are eligible for waivers or
reductions of initial sales charges and CDSCs
Prospectus 32
<PAGE>
Calculation When you buy shares of the Portfolios, you pay a price equal to
of Share the NAV of the shares, plus any applicable sales charge. When you
Price and sell (redeem) shares, you receive an amount equal to the NAV of
Redemption the shares, minus any applicable CDSC. NAVs are determined at the
Payments close of regular trading (normally, 4:00 p.m., Eastern time) on
the New York Stock Exchange on each day the New York Stock
Exchange is open. See "How Portfolio Shares Are Priced" above for
details. Generally, purchase and redemption orders for Portfolio
shares are processed at the NAV next calculated after your order
is received by the Distributor. There are certain exceptions where
an order is received by a broker or dealer prior to the close of
regular trading on the New York Stock Exchange and then
transmitted to the Distributor after the NAV has been calculated
for that day (in which case the order may be processed at that
day's NAV). Please see the Guide for details.
The Trust does not calculate NAVs or process orders on days when
the New York Stock Exchange is closed. If your purchase or
redemption order is received by the Distributor on a day when the
New York Stock Exchange is closed, it will be processed on the
next succeeding day when the New York Stock Exchange is open (at
the succeeding day's NAV).
Buying You can buy Class A, Class B or Class C shares of the Portfolios
Shares in the following ways:
. Through your broker, dealer or other financial intermediary.
Your broker, dealer or other intermediary may establish higher
minimum investment requirements than the Trust and may also
independently charge you transaction fees and additional amounts
(which may vary) in return for its services, which will reduce
your return. Shares you purchase through your broker, dealer or
other intermediary will normally be held in your account with that
firm.
. Directly from the Trust. To make direct investments, you must
open an account with the Distributor and send payment for your
shares either by mail or through a variety of other purchase
options and plans offered by the Trust.
If you wish to invest directly by mail, please send a check
payable to PIMCO Funds Distributors LLC, along with a completed
application form to:
PIMCO Funds Distributors LLC
P.O. Box 9688
Providence, RI 02940-0926
The Trust accepts all purchases by mail subject to collection of
checks at full value and conversion into federal funds. You may
make subsequent purchases by mailing a check to the address above
with a letter describing the investment or with the additional
investment portion of a confirmation statement. Checks for
subsequent purchases should be payable to PIMCO Funds Distributors
LLC and should clearly indicate your account number. Please call
the Distributor at 1-800-426-0107 if you have any questions
regarding purchases by mail.
The Guide describes a number of additional ways you can make
direct investments, including through the PIMCO Funds Auto-Invest
and PIMCO Funds Fund Link programs. You can obtain a Guide free of
charge from the Distributor by written request or by calling 1-
800-426-0107. See "PIMCO Funds Shareholders' Guide" above.
The Distributor, in its sole discretion, may accept or reject any
order for purchase of Portfolio shares. No share certificates will
be issued unless specifically requested in writing.
Investment The following investment minimums apply for purchases of Class A,
Minimums Class B and Class C shares:
<TABLE>
<CAPTION>
Initial Investment Subsequent Investments
------------------ ----------------------
<S> <C>
$2,500 per Portfolio $100 per Portfolio
</TABLE>
Lower minimums may apply for certain categories of investors,
including certain tax-qualified retirement plans, and for special
investment programs and plans offered by the Trust, such as the
PIMCO Funds Auto-Invest and PIMCO Funds Fund Link programs. Please
see the Guide for details.
Small Because of the disproportionately high costs of servicing accounts
Account with low balances, if you have a direct account with the
Fee Distributor, you will be charged a fee at the annual rate of $16
if your account balance for any Portfolio falls below a minimum
level of $2,500, except for Uniform Gift to Minors, IRA, Roth IRA
and Auto-Invest accounts for which the limit is $1,000. The fee
also applies to employer-sponsored retirement plan accounts, Money
Purchase and/or Profit Sharing plans, 401(k) plans, 403(b)(7)
custodial accounts, SIMPLE IRAs, SEPs and SAR/SEPs. (A separate
custodial fee may
33 PIMCO Funds: Multi-Manager Series
<PAGE>
apply to IRAs, Roth IRAs and other retirement accounts.) However,
you will not be charged this fee if the aggregate value of all of
your PIMCO Funds accounts is at least $50,000. Any applicable
small account fee will be deducted automatically from your below-
minimum Portfolio account in quarterly installments and paid to
the Administrator. Each Portfolio account will normally be valued,
and any deduction taken, during the last five business days of
each calendar quarter. Lower minimum balance requirements and
waivers of the small account fee apply for certain categories of
investors. Please see the Guide for details.
Minimum Due to the relatively high cost to the Portfolios of maintaining
Account small accounts, you are asked to maintain an account balance in
Size each Portfolio in which you invest of at least the minimum
investment necessary to open the particular type of account. If
your balance for any Portfolio remains below the minimum for three
months or longer, the Administrator has the right (except in the
case of employer-sponsored retirement accounts) to redeem your
remaining shares and close that Portfolio account after giving you
60 days to increase your balance. Your Portfolio account will not
be liquidated if the reduction in size is due solely to a decline
in market value of your Portfolio shares or if the aggregate value
of all your PIMCO Funds accounts exceeds $50,000.
Exchanging You may exchange your Class A, Class B or Class C shares of any
Shares Portfolio for the same Class of shares of any other Portfolio or
of another series of the Trust or PIMCO Funds: Pacific Investment
Management Series, subject to any restrictions on exchanges set
forth in the applicable fund's or series' prospectus(es). Shares
are exchanged on the basis of their respective NAVs next
calculated after your exchange order is received by the
Distributor. Currently, the Trust does not charge any exchange
fees or charges. Exchanges are subject to the $2,500 minimum
initial purchase requirements for each Portfolio, except with
respect to tax-qualified programs and exchanges effected through
the PIMCO Funds Auto-Exchange plan. In addition, an exchange is
generally a taxable event which will generate capital gains or
losses, and special rules may apply in computing tax basis when
determining gain or loss. If you maintain your account with the
Distributor, you may exchange shares by completing a written
exchange request and sending it to PIMCO Funds Distributors LLC,
P.O. Box 9688, Providence, RI 02940-0926. You can get an exchange
form by calling the Distributor at 1-800-426-0107.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Portfolio and its shareholders. In particular, a pattern
of exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Portfolio. Currently, the Trust limits the number of
"round trip" exchanges an investor may make. An investor makes a
"round trip" exchange when the investor purchases shares of a
particular Portfolio, subsequently exchanges those shares for
shares of a different PIMCO Fund and then exchanges back into the
originally purchased Portfolio. The Trust has the right to refuse
any exchange for any investor who completes (by making the
exchange back into the shares of the originally purchased
Portfolio) more than six round trip exchanges in any twelve-month
period. Although the Trust has no current intention of terminating
or modifying the exchange privilege other than as set forth in the
preceeding sentence, it reserves the right to do so at any time.
Except as otherwise permitted by the Securities and Exchange
Commission, the Trust will give you 60 days' advance notice if it
exercises its right to terminate or materially modify the exchange
privilege with respect to Class A, B and C shares.
The Guide provides more detailed information about the exchange
privilege, including the procedures you must follow and additional
exchange options. You can obtain a Guide free of charge from the
Distributor by written request or by calling 1-800-426-0107. See
"PIMCO Funds Shareholders' Guide" above.
Selling You can sell (redeem) Class A, Class B or Class C shares of the
Shares Portfolios in the following ways:
. Through your broker, dealer or other financial intermediary.
Your broker, dealer or other intermediary may independently charge
you transaction fees and additional amounts (which may vary) in
return for its services, which will reduce your return.
. Directly from the Trust by Written Request. To redeem shares
directly from the Trust by written request (whether or not the
shares are represented by certificates), you must send the
following items to the Trust's Transfer Agent, PFPC, Inc., P.O.
Box 9688, Providence, RI 02940-0926:
(1) a written request for redemption signed by all registered
owners exactly as the account is registered on the Transfer
Agent's records, including fiduciary titles, if any, and
specifying the account number and the dollar amount or number of
shares to be redeemed;
Prospectus 34
<PAGE>
(2) for certain redemptions described below, a guarantee of all
signatures on the written request or on the share certificate or
accompanying stock power, if required, as described under
"Signature Guarantee" below;
(3) any share certificates issued for any of the shares to be
redeemed (see "Certificated Shares" below); and
(4) any additional documents which may be required by the
Transfer Agent for redemption by corporations, partnerships or
other organizations, executors, administrators, trustees,
custodians or guardians, or if the redemption is requested by
anyone other than the shareholder(s) of record. Transfers of
shares are subject to the same requirements.
A signature guarantee is not required for redemptions requested
by and payable to all shareholders of record for the account that
is to be sent to the address of record for that account. To avoid
delay in redemption or transfer, if you have any questions about
these requirements you should contact the Transfer Agent in
writing or call 1-800-426-0107 before submitting a request.
Written redemption or transfer requests will not be honored until
all required documents in the proper form have been received by
the Transfer Agent. You can not redeem your shares by written
request to the Trust if they are held in broker "street name"
accounts--you must redeem through your broker.
If the proceeds of your redemption (i) are to be paid to a person
other than the record owner, (ii) are to be sent to an address
other than the address of the account on the Transfer Agent's
records, or (iii) are to be paid to a corporation, partnership,
trust or fiduciary, the signature(s) on the redemption request and
on the certificates, if any, or stock power must be guaranteed as
described under "Signature Guarantee" below. The Distributor may,
however, waive the signature guarantee requirement for redemptions
up to $2,500 by a trustee of a qualified retirement plan, the
administrator for which has an agreement with the Distributor.
The Guide describes a number of additional ways you can redeem
your shares, including:
. Telephone requests to the Transfer Agent
. PIMCO Funds Automated Telephone System (ATS)
. Expedited wire transfers
. Automatic Withdrawal Plan
. PIMCO Funds Fund Link
Unless you specifically elect otherwise, your initial account
application permits you to redeem shares by telephone subject to
certain requirements. To be eligible for ATS, expedited wire
transfer, Automatic Withdrawal Plan, and Fund Link privileges, you
must specifically elect the particular option on your account
application and satisfy certain other requirements. The Guide
describes each of these options and provides additional
information about selling shares. You can obtain a Guide free of
charge from the Distributor by written request or by calling 1-
800-426-0107.
Other than an applicable CDSC, you will not pay any special fees
or charges to the Trust or the Distributor when you sell your
shares. However, if you sell your shares through your broker,
dealer or other financial intermediary, that firm may charge you a
commission or other fee for processing your redemption request.
Redemptions of Portfolio shares may be suspended when trading on
the New York Stock Exchange is restricted or during an emergency
which makes it impracticable for the Portfolios or the Underlying
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 payments for more than seven
days, as permitted by law.
Timing of
Redemption
Payments
Redemption proceeds will normally be mailed to the redeeming
shareholder within seven calendar days or, in the case of wire
transfer or Fund Link redemptions, sent to the designated bank
account within one business day. Fund Link redemptions may be
received by the bank on the second or third business day. In cases
where shares have recently been purchased by personal check,
redemption proceeds may be withheld until the check has been
collected, which may take up to 15 days. To avoid such
withholding, investors should purchase shares by certified or bank
check or by wire transfer. Under unusual circumstances, the Trust
may delay your redemption payments for more than seven days, as
permitted by law.
35 PIMCO Funds: Multi-Manager Series
<PAGE>
Redemptions The Trust has agreed to redeem shares of each Portfolio solely in
In Kind cash up to the lesser of $250,000 or 1% of the Portfolio's net
assets during any 90-day period for any one shareholder. In
consideration of the best interests of the remaining shareholders,
the Trust may pay any redemption proceeds exceeding this amount in
whole or in part by a distribution in kind of securities held by a
Portfolio in lieu of cash. If your shares are redeemed in kind,
you may incur transaction costs upon the disposition of the
securities received in the distribution.
CertificatedIf you are redeeming shares for which certificates have been
Shares issued, the certificates must be mailed to or deposited with the
Trust, duly endorsed or accompanied by a duly endorsed stock power
or by a written request for redemption. Signatures must be
guaranteed as described under "Signature Guarantee" below. The
Trust may request further documentation from institutions or
fiduciary accounts, such as corporations, custodians (e.g., under
the Uniform Gifts to Minors Act), executors, administrators,
trustees or guardians. Your redemption request and stock power
must be signed exactly as the account is registered, including
indication of any special capacity of the registered owner.
Signature When a signature guarantee is called for, you should have
Guarantee "Signature Guaranteed" stamped under your signature and guaranteed
by any of the following entities: U.S. banks, foreign banks having
a U.S. correspondent bank, credit unions, savings associations,
U.S. registered dealers and brokers, municipal securities dealers
and brokers, government securities dealers and brokers, national
securities exchanges, registered securities associations and
clearing agencies (each an "Eligible Guarantor Institution"). The
Distributor reserves the right to reject any signature guarantee
pursuant to its written signature guarantee standards or
procedures, which may permit it to reject signature guarantees
from Eligible Guarantor Institutions that do not, based on credit
guidelines, satisfy such written standards or procedures.
Beginning January 1, 2001, when a signature guarantee is called
for, a "medallion" signature guarantee will be required. A
medallion signature guarantee may be obtained from a domestic bank
or trust company, broker, dealer, clearing agency, savings
association or other financial institution which is participating
in a medallion program recognized by the Securities Transfer
Association. The three recognized medallion programs are the
Securities Transfer Agents Medallion Program (STAMP), Stock
Exchanges Medallion Program (SEMP) and New York Stock Exchange,
Inc. Medallion Signature Program (NYSE MSP). Signature guarantees
from financial institutions which are not participating in a
recognized medallion program may still be ineligible to provide a
signature guarantee for transactions of greater than a specified
dollar amount. The Trust may change the signature guarantee
requirements from time to time upon notice to shareholders, which
may be given by means of a new or supplemented Prospectus or a new
or supplemented Guide. Shareholders should contact the Distributor
for additional details regarding the Portfolios' signature
guarantee requirements.
Portfolio Distributions
Each Portfolio distributes substantially all of its net investment
income to shareholders in the form of dividends. You begin earning
dividends on Portfolio shares the day after the Trust receives
your purchase payment. Dividends paid by each Portfolio with
respect to each class of shares are calculated in the same manner
and at the same time, but dividends on Class B and Class C shares
are expected to be lower than dividends on Class A shares as a
result of the distribution fees applicable to Class B and Class C
shares. The following shows when each Portfolio intends to declare
and distribute income dividends to shareholders of record.
<TABLE>
<CAPTION>
Portfolio At Least Annually Quarterly Monthly
---------------------------------------------------------------------------
<S> <C> <C> <C>
90/10 Portfolio .
---------------------------------------------------------------------------
60/40 Portfolio .
---------------------------------------------------------------------------
30/70 Portfolio .
---------------------------------------------------------------------------
</TABLE>
In addition, each Portfolio distributes any net capital gains it
earns from the sale of portfolio securities to shareholders no
less frequently than annually. Net short-term capital gains may be
paid more frequently.
Prospectus 36
<PAGE>
You can choose from the following distribution options:
. Reinvest all distributions in additional shares of the same
class of your Portfolio at NAV. This will be done unless you
elect another option.
. Invest all distributions in shares of the same class of any
other Portfolio or another series of the Trust or PIMCO Funds:
Pacific Investment Management Series which offers that class at
NAV. You must have an account existing in the Portfolio or
series selected for investment with the identical registered
name. You must elect this option on your account application or
by a telephone request to the Transfer Agent at 1-800-426-0107.
. Receive all distributions in cash (either paid directly to you
or credited to your account with your broker or other financial
intermediary). You must elect this option on your account
application or by a telephone request to the Transfer Agent at
1-800-426-0107.
You do not pay any sales charges on shares you receive through
the reinvestment of Portfolio distributions.
If you elect to receive Portfolio distributions in cash and the
postal or other delivery service is unable to deliver checks to
your address of record, the Trust's Transfer Agent will hold the
returned checks for your benefit in a non-interest bearing
account.
For further information on distribution options, please contact
your broker or call the Distributor at 1-800-426-0107.
Tax Consequences
. Taxes on Portfolio distributions. If you are subject to U.S.
federal income tax, you will be subject to tax on Portfolio
distributions whether you received them in cash or reinvested them
in additional shares. For federal income tax purposes, Portfolio
distributions will be taxable to you as either ordinary income or
capital gains.
Portfolio dividends (i.e., distributions of investment income)
are taxable to you as ordinary income. Federal taxes on Portfolio
distributions of gains are determined by how long the Portfolio
owned the investments that generated the gains, rather than how
long you have owned your shares. Distributions of gains from
investments that a Portfolio owned for more than 12 months will
generally be taxable to you as capital gains. Distributions of
gains from investments that the Portfolio owned for 12 months or
less will generally be taxable to you as ordinary income.
Portfolio distributions are taxable to you even if they are paid
from income or gains earned by a Portfolio prior to your
investment and thus were included in the price you paid for your
shares. For example, if you purchase shares on or just before the
record date of a Portfolio distribution, you will pay full price
for the shares and may receive a portion of your investment back
as a taxable distribution.
The Portfolios' use of a fund of funds structure could affect the
amount, timing and character of distributions to shareholders. See
"Taxation--Distributions" in the Statement of Additional
Information.
. Taxes when you sell (redeem) or exchange your shares. Any gain
resulting from the sale of Portfolio shares will generally be
subject to federal income tax. When you exchange shares of a
Portfolio for shares of another Portfolio or series of the Trust,
the transaction will be treated as a sale of the first Portfolio's
shares for these purposes, and any gain on those shares will
generally be subject to federal income tax.
This section relates only to federal income tax consequences of
investing in the Portfolios; the consequences under other tax laws
may differ. You should consult your tax advisor as to the possible
application of foreign, state and local income tax laws to
Portfolio dividends and capital distributions. Please see the
Statement of Additional Information for additional information
regarding the tax aspects of investing in the Portfolios.
37 PIMCO Funds: Multi-Manager Series
<PAGE>
(This page left blank intentionally)
Prospectus 38
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Class A, Class B and Class C shares
of each Portfolio since the class of shares was first offered.
Certain information reflects financial results for a single
Portfolio share. The total returns in the table represent the rate
that an investor would have earned or lost on an investment in a
particular class of shares of a Portfolio, assuming reinvestment
of all dividends and distributions. This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with
each Portfolio's financial statements, are included in the Trust's
annual report to shareholders. The annual report is incorporated
by reference in the Statement of Additional Information and is
available free of charge upon request from the Distributor.
<TABLE>
<CAPTION>
Net Realized/ Dividends Dividends in
Year or Net Asset Value Net Unrealized Total Income From Net Excess of Net
Period Beginning Investment Gain (Loss) on From Investment Investment Investment
Ended of Period Income (Loss) Investments Operations Income Income
-------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
90/10 Portfolio
Class A
06/30/00 $12.17 $0.52(a) $0.84(a) $1.36 $(0.16) $ 0.00
06/30/99(b) 10.00 0.16(a) 2.19(a) 2.35 (0.15) (0.03)
Class B
06/30/00 12.11 0.42(a) 0.84(a) 1.26 (0.11) 0.00
06/30/99(b) 10.00 0.16(a) 2.13(a) 2.29 (0.15) (0.03)
Class C
06/30/00 12.11 0.42(a) 0.83(a) 1.25 (0.12) 0.00
06/30/99(b) 10.00 0.07(a) 2.22(a) 2.29 (0.15) (0.03)
60/40 Portfolio
Class A
06/30/00 $11.27 $0.56(a) $0.44(a) $1.00 $(0.35) $ 0.00
06/30/99(b) 10.00 0.31(a) 1.23(a) 1.54 (0.27) 0.00
Class B
06/30/00 11.25 0.48(a) 0.44(a) 0.92 (0.27) 0.00
06/30/99(b) 10.00 0.16(a) 1.31(a) 1.47 (0.22) 0.00
Class C
06/30/00 11.24 0.48(a) 0.44(a) 0.92 (0.26) 0.00
06/30/99(b) 10.00 0.18(a) 1.29(a) 1.47 (0.23) 0.00
30/70 Portfolio
Class A
06/30/00 $10.33 $0.58(a) $0.10(a) $0.68 $(0.47) $ 0.00
06/30/99(b) 10.00 0.58(a) 0.11(a) 0.69 (0.36) 0.00
Class B
06/30/00 10.32 0.50(a) 0.11(a) 0.61 (0.39) 0.00
06/30/99(b) 10.00 0.32(a) 0.31(a) 0.63 (0.31) 0.00
Class C
06/30/00 10.30 0.50(a) 0.11(a) 0.61 (0.39) 0.00
06/30/99(b) 10.00 0.26(a) 0.36(a) 0.62 (0.32) 0.00
</TABLE>
-------
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
(b) Commenced operations on September 30, 1998.
39 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ditributionss Ratio of Net
from Ratio of Investment
NteRealized Net Asset Expenses to Income (Loss) to
Capital Total Value End of Net Assets End Average Net Average Net Portfolio
Gains Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$(0.59) $(0.75 $12.78 11.48% $ 1,161 0.65% 4.16% 18%
0.00 (0.18) 12.17 23.69 647 0.65* 1.91* 48
(0.59) (0.70) 12.67 10.68 2,610 1.40 3.41 18
0.00 (0.18) 12.11 23.03 1,920 1.40* 1.87* 48
(0.59) (0.71) 12.65 10.58 15,846 1.40 3.41 18
0.00 (0.18) 12.11 23.03 7,969 1.40* 0.77* 48
$(0.44) $(0.79) $11.48 9.15% $ 2,170 0.65% 4.96% 44%
0.00 (0.27) 11.27 15.50 2,196 0.65* 3.76* 39
(0.44) (0.71) 11.46 8.36 4,415 1.40 4.21 44
0.00 (0.22) 11.25 14.83 3,653 1.40* 1.92* 39
(0.44) (0.70) 11.46 8.41 10,376 1.40 4.22 44
0.00 (0.23) 11.24 14.82 9,826 1.40* 2.14* 39
$(0.19) $(0.66) $10.35 6.79% $ 335 0.65% 5.65% 52%
0.00 (0.36) 10.33 6.91 407 0.65* 7.54* 37
(0.19) (0.58) 10.35 6.08 1,658 1.40 4.90 52
0.00 (0.31) 10.32 6.29 1,738 1.40* 4.09* 37
(0.19) (0.58) 10.33 6.08 3,645 1.40 4.90 52
0.00 (0.32) 10.30 6.27 4,969 1.40* 3.39* 37
</TABLE>
Prospectus
40
<PAGE>
PIMCO Funds Asset Allocation Series
Actively managed Portfolios of select PIMCO Funds
The Trust's Statement of Additional Information ("SAI") and
annual and semi-annual reports to shareholders include
additional information about the Portfolios. In addition, the
current Trust prospectus and the prospectus of PIMCO Funds:
Pacific Investment Management Series relating to Institutional
Class shares of the Underlying Funds contain additional
information about the Underlying Funds. The SAI, the financial
statements included in the Portfolios' most recent annual report
to shareholders, and the Underlying Fund prospectuses are
incorporated by reference into this Prospectus, which means they
are part of this Prospectus for legal purposes. The Portfolios'
annual report discusses the market conditions and investment
strategies that significantly affected each Portfolio's
performance during its last fiscal year.
The SAI includes the PIMCO Funds Shareholders' Guide for Class
A, B and C Shares, a separate booklet which contains more
detailed information about Portfolio purchase, redemption and
exchange options and procedures and other information about the
Portfolios. You can get a free copy of the Guide together with
or separately from the rest of the SAI.
You may get free copies of any of these materials, request other
information about a Portfolio or the Underlying Funds, or make
shareholder inquiries by calling 1-800-426-0107, or by writing
to:
PIMCO Funds Distributors LLC
2187 Atlantic Street
Stamford, Connecticut 06902
You may review and copy information about the Trust, the
Portfolios and the Underlying Funds, including the SAI and the
Underlying Fund prospectuses, at the Securities and Exchange
Commission's public reference room in Washington, D.C. You may
call the Commission at 1-202-942-8090 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 writing the Public Reference Section of the Commission,
Washington, D.C. 20549-6009, or by electronic request at the
following e-mail address: [email protected]. You may need to
refer to the Trust's file number under the Investment Company
Act, which is 811-6161.
You can also visit our Web site at www.pimcofunds.com for
additional information about the Portfolios and the Underlying
Funds.
[LOGO OF PIMCO FUNDS APPEARS HERE]
File No. 811-6161
<PAGE>
--------------------------------------------------------------------
PIMCO FundsINVESTMENT ADVISER AND ADMINISTRATOR
Asset PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Allocation 92660
Series --------------------------------------------------------------------
DISTRIBUTOR
PIMCO Funds Distributors LLC, 2187 Atlantic Street, Stamford, CT
06902
--------------------------------------------------------------------
CUSTODIAN
State Street Bank & Trust Co., 801 Pennsylvania, Kansas City, MO
64105
--------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT AND TRANSFER AGENT
PFPC, Inc., P.O. Box 9688, Providence, RI 02940
--------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
--------------------------------------------------------------------
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
--------------------------------------------------------------------
For further information about the PIMCO Funds, call 1-800-426-0107
or visit our Web site at www.pimcofunds.com.
Not part of the Prospectus
<PAGE>
Presenting the new PIMCO Funds Web site 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 Innovation Center
The all-new PIMCO Funds Innovation Center is an invaluable resource for tech
investors and those contemplating an investment in this complex, fast-moving
sector. Dedicated to the research and analysis of technology, the Center
provides a number of key resources, including:
. Innovation Newsletter--An online version of our popular technology investing
newsletter, featuring the latest market analysis and outlook from Dennis
McKechnie, PIMCO's renowned tech manager.
. Timely Market Commentary--PIMCO's perspective on unfolding market events.
. Theme Analysis--Manager assessments of the trends or "themes" that PIMCO
believes are driving the tech sector and the industry groups that make up the
market.
Daily Manager Commentary
PIMCO's Daily Manager Commentary provides investment insights from PIMCO's fund
managers, including their outlooks on the economy and the fund strategies that
relate to the current economic climate. This commentary, on a wide range of
subjects, is uniquely provided from he manager's perspective and helps
investors make informed decisions based on information directly from PIMCO's
investment professionals.
PZ008. 11/00 Not part of the Prospectus
--------------------------------------------------------------------------------
[LOGO OF PIMCO FUNDS] --------------------
PRESORTED
PIMCO Funds STANDARD
Distributors LLC U.S. POSTAGE
PAID
2187 Atlantic Street SMITHTOWN, NY
Stamford, CT 06902-6896 PERMIT NO. 700
--------------------
<PAGE>
November 1, 2000 Share Classes
Ins Institutional
Adm Administrative
MULTI-MANAGER SERIES
Prospectus
-------------------------------------------------------------------------------
NFJ INVESTMENT GROUP
NFJ Equity Income Fund
NFJ Value Fund
NFJ Value 25 Fund
This cover is not part of the prospectus
<PAGE>
Prospectus
PIMCO This Prospectus describes three mutual funds offered by PIMCO
Funds: Funds: Multi-Manager Series. The Funds provide access to the
Multi- professional investment advisory services offered by PIMCO
Manager Advisors L.P. and its affiliate, NFJ Investment Group.
Series
November 1, This Prospectus explains what you should know about the Funds
2000 before you invest. Please read it carefully.
Share The Securities and Exchange Commission has not approved or
Classes disapproved these securities or determined if this Prospectus is
Institu- truthful or complete. Any representation to the contrary is a
tional and criminal offense.
Adminis-
trative
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Fund Summaries
NFJ Equity Income Fund......................................... 5
NFJ Value Fund................................................. 7
NFJ Value 25 Fund.............................................. 9
Summary of Principal Risks....................................... 11
Management of the Funds.......................................... 13
Investment Options -- Institutional Class and Administrative
Class Shares.................................................... 15
Purchases, Redemptions and Exchanges............................. 16
How Fund Shares Are Priced....................................... 20
Fund Distributions............................................... 21
Tax Consequences................................................. 21
Characteristics and Risks of Securities and Investment
Techniques...................................................... 22
Financial Highlights............................................. 29
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The table below lists the investment objectives and certain investment
characteristics of the Funds. Other important characteristics are described
in the individual Fund Summaries beginning on page 5.
<TABLE>
<CAPTION>
Approximate
Number of
Sub-Adviser Fund Investment Objective Main Investments Holdings
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Investment NFJ Equity Current income as a Income producing common stocks of 40-50
Group Income primary objective; companies with market capitalizations
long-term growth of of more than $2 billion
capital is a secondary
objective
-----------------------------------------------------------------------------------------------
NFJ Value Long-term growth of Common stocks of companies with market 40
capital and income capitalizations of more than $2
billion that are undervalued relative
to the market and their industry
groups
-----------------------------------------------------------------------------------------------
NFJ Value 25 Long-term growth of Approximately 25 common stocks of 25
capital and income companies with market capitalizations
of between $1 billion and $5 billion
and below-average price-to-earnings
ratios relative to their industry
groups
----------------------------------------------------------------------------------------------------------
</TABLE>
Fund The following Fund Summaries identify each Fund's investment
Descrip- objective, principal investments and strategies, principal
tions, risks, performance information and fees and expenses. A more
Performance detailed "Summary of Principal Risks" describing principal risks
and Fees of investing in the Funds begins after the Fund Summaries.
It is possible to lose money on investments in the Funds. The
fact that a Fund may have had good performance in the past (for
example, during the year ended 1999) is no assurance that the
value of the Fund's investments will not decline in the future
or appreciate at a slower rate. An investment in a Fund is not a
deposit of a bank and is not insured or guaranteed by the
Federal Deposit Insurance Corporation or any other government
agency.
3 PIMCO Funds: Multi-Manager Series
<PAGE>
(This page left blank intentionally)
Prospectus 4
<PAGE>
NFJ Equity Income Fund
-------------------------------------------------------------------------------
Principal Investment ObjectiveFund Focus Approximate
Investments Seeks current Income producing Capitalization
and income as a common stocks Range
Strategies primary with potential More than $2
objective; long- for capital billion
term growth of appreciation
capital is a
secondary Approximate Dividend
objective Number of Frequency
Holdings Quarterly
40-50
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's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. From this group of stocks, the Fund
buys approximately 25 stocks with the highest dividend yields. The
portfolio managers then screen the most undervalued companies in
each industry by dividend yield to identify the highest yielding
stocks in each industry. From this group, the Fund buys
approximately 25 additional stocks with the lowest P/E ratios.
In selecting stocks, the portfolio managers consider quantitative
factors such as price momentum (based on changes in stock price
relative to changes in overall market prices), earnings momentum
(based on analysts' earnings per share estimates and revisions to
those estimates), relative dividend yields, valuation relative to
the overall market and trading liquidity. The portfolio managers
may replace a stock when a stock within the same industry group
has a considerably higher dividend yield or lower valuation than
the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
-------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Value Securities Risk . Management Risk
. Issuer Risk . Credit Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
-------------------------------------------------------------------------------
Performance The Fund does not yet have a full calendar year of performance.
Information Thus, no bar chart or average annual total returns table is
included for the Fund.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
NFJ Equity Income Fund (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
------------------------------------------------------------------
Institutional 0.45% None 0.25% 0.70%
------------------------------------------------------------------
Administrative 0.45 0.25% 0.25 0.95
------------------------------------------------------------------
</TABLE>
(1) Other Expenses is based on estimated amounts for the current
fiscal year and reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
------------------------------------------------------------------
Institutional $72 $224 $390 $ 871
------------------------------------------------------------------
Administrative 97 303 525 1,166
------------------------------------------------------------------
</TABLE>
Prospectus 6
<PAGE>
NFJ Value Fund
-------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued larger Capitalization Range
and Seeks long-term capitalization More than $2 billion
Strategies growth of capital common stocks
and income
Approximate Number Dividend Frequency
of Holdings Quarterly
40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of more than $2 billion at the time of
investment and below average P/E ratios relative to the market and
their respective industry groups. To achieve income, the Fund
invests a portion of its assets in income-producing (e.g.,
dividend-paying) common stocks.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. After narrowing this universe to
approximately 150 candidates, the portfolio managers select
approximately 40 stocks for the Fund, each representing a
different industry group. The portfolio managers select stocks
based on a quantitative analysis of factors including price
momentum (based on changes in stock price relative to changes in
overall market prices), earnings momentum (based on analysts'
earnings per share estimates and revisions to those estimates),
relative dividend yields, valuation relative to the overall market
and trading liquidity. The Fund's portfolio is generally
rebalanced quarterly. The portfolio managers may also replace a
stock when a stock within the same industry group has a
considerably lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
-------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Value Securities . Management Risk
. Issuer Risk 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 Fund does not yet have a full calendar year of performance.
Information Thus, no bar chart or average annual total returns table is
included for the Fund.
7 PIMCO Funds: Multi-Manager Series
<PAGE>
NFJ Value Fund (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)
None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
------------------------------------------------------------------
Institutional 0.45% None 0.25% 0.70%
------------------------------------------------------------------
Administrative 0.45 0.25% 0.25 0.95
------------------------------------------------------------------
(1) Other Expenses is based on estimated amounts for the current
fiscal year and reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
------------------------------------------------------------------
Institutional $72 $224 $390 $ 871
------------------------------------------------------------------
Administrative 97 303 525 1,166
------------------------------------------------------------------
</TABLE>
Prospectus 8
<PAGE>
NFJ Value 25 Fund
--------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued medium Capitalization Range
and Seeks long-term capitalization Between $1 billion
Strategies growth of capital common stocks and $5 billion
and income
Approximate Number Dividend Frequency
of Holdings At least annually
25
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of between $1 billion and $5 billion
at the time of investment and below average P/E ratios relative to
their respective industry groups. The Fund normally invests in
approximately 25 common stocks. To achieve income, the Fund
invests a portion of its assets in income-producing (e.g.,
dividend-paying) common stocks.
The Fund's initial selection universe consists of approximately
600 stocks of companies within the Fund's capitalization range.
The portfolio managers classify the universe by industry. They
then identify the most undervalued stocks in each industry based
mainly on relative P/E ratios, calculated both with respect to
trailing operating earnings and forward earnings estimates. The
portfolio managers then select approximately 25 stocks, each
representing a different industry group. Each stock has close to
equal weighting in the portfolio. The portfolio managers select
stocks based on an analysis of factors including price momentum
(based on changes in stock price relative to changes in overall
market prices), earnings momentum (based on analysts' earnings per
share estimates and revisions to those estimates), relative
dividend yields and trading liquidity. The Fund's portfolio is
generally rebalanced quarterly. The portfolio managers may also
replace a stock when a stock within the same industry group has a
considerably lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully
invested in common stocks (aside from certain cash management
practices). The Fund may temporarily hold up to 25% of its assets
in cash and cash equivalents for defensive purposes in response to
unfavorable market and other conditions. This would be
inconsistent with the Fund's investment objective and principal
strategies.
--------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Smaller Company Risk . Credit Risk
. Issuer Risk . Liquidity Risk . Management Risk
. Value Securities . 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 Fund does not yet have a full calendar year of performance.
Information Thus, no bar chart or average annual total returns table is
included for the Fund.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
NFJ Value 25 Fund (continued)
--------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
------------------------------------------------------------------
Institutional 0.50% None 0.25% 0.75%
------------------------------------------------------------------
Administrative 0.50 0.25% 0.25 1.00
------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
Share Class Year 1 Year 3 Year 5 Year 10
------------------------------------------------------------------
Institutional $ 77 $240 $417 $ 930
------------------------------------------------------------------
Administrative 102 318 552 1,225
------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
Summary of Principal Risks
The value of your investment in a Fund changes with the values of
that Fund's investments. Many factors can affect those values. The
factors that are most likely to have a material effect on a
particular Fund's portfolio as a whole are called "principal
risks." The principal risks of each Fund are identified in the
Fund Summaries and are summarized in this section. Each Fund may
be subject to additional principal risks and risks other than
those described below because the types of investments made by
each Fund can change over time. Securities and investment
techniques mentioned in this summary and described in greater
detail under "Characteristics and Risks of Securities and
Investment Techniques" appear in bold type. That section and
"Investment Objectives and Policies" in the Statement of
Additional Information also include more information about the
Funds, their investments and the related risks. There is no
guarantee that a Fund will be able to achieve its investment
objective.
Market The market price of securities owned by a Fund may go up or down,
Risk sometimes rapidly or unpredictably. Each of the Funds normally
invests most of its assets in common stocks and/or other equity
securities. A principal risk of investing in each Fund is that the
equity securities in its portfolio will decline in value due to
factors affecting equity securities markets generally or
particular industries represented in those markets. The values of
equity securities may decline due to general market conditions
which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the
general outlook for corporate earnings, changes in interest or
currency rates or adverse investor sentiment generally. They may
also decline due to factors which affect a particular industry or
industries, such as labor shortages or increased production costs
and competitive conditions within an industry. Equity securities
generally have greater price volatility than fixed income
securities.
Issuer The value of a security may also decline for a number of reasons
Risk which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
Value The Funds place particular emphasis on investing in securities of
Securities companies that may not be expected to experience significant
Risk earnings growth, but whose securities its portfolio manager
believes are selling at a price lower than their true value (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.
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 NFJ Value 25 Fund may have significant exposure to this risk
because it invests substantial assets in companies with medium-
sized market capitalizations, which are smaller and generally
less-seasoned than the largest companies.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
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.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies increases risk. Funds, such as the NFJ Value
Risk 25 Fund, that 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. Also, the Funds may from time to time have
greater risk to the extent they invest a substantial portion of
their assets in companies in related industries such as
"technology" or "financial and business services," which may share
common characteristics, are often subject to similar business
risks and regulatory burdens, and whose securities may react
similarly to economic, market, political or other developments.
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 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, NFJ 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.
Prospectus 12
<PAGE>
Management of the Funds
Investment PIMCO Advisors serves as the investment adviser and the
Adviser administrator (serving in its capacity as administrator, the
and "Administrator") for the Funds. Subject to the supervision of the
Adminis- Board of Trustees, PIMCO Advisors is responsible for managing,
trator either directly or through others selected by it, the investment
activities of the Funds and the Funds' business affairs and other
administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of September 30, 2000, PIMCO Advisors and its subsidiary
partnerships had approximately $272 billion in assets under
management.
PIMCO Advisors has retained an affiliated investment management
firm, NFJ Investment Group ("NFJ" or the "Sub-Adviser") to manage
each Fund's investments. See "Sub-Adviser" below. PIMCO Advisors
has retained its affiliate, Pacific Investment Management Company
LLC ("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. PIMCO
Advisors (and not the Funds) pays a portion of the advisory fees
it receives to NFJ in return for NFJ's services as Sub-Adviser.
The Funds pay 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>
NFJ Equity Income and NFJ Value Funds 0.45%
NFJ Value 25 Fund 0.50%
</TABLE>
Adminis- Each Fund pays for the administrative services it requires under a
trative fee structure which is essentially fixed. Institutional and
Fees Administrative Class shareholders of each Fund pay an
administrative fee to PIMCO Advisors, computed as a percentage of
the Fund's assets attributable in the aggregate to those classes
of shares. PIMCO Advisors, in turn, provides or procures
administrative services for Institutional and Administrative Class
shareholders and also bears the costs of most third-party services
required by the Funds, including audit, custodial, portfolio
accounting, legal, transfer agency and printing costs. The Funds
do bear other expenses which are not covered under the
administrative fee which may vary and affect the total level of
expenses paid by Institutional and Administrative Class
shareholders, such as brokerage fees, commissions and other
transaction expenses, costs of borrowing money, including interest
expenses, and fees and expenses of the Trust's disinterested
Trustees.
Institutional and Administrative Class shareholders of the Funds
pay PIMCO Advisors monthly administrative fees at the annual rate
of 0.25% (stated as a percentage of the average daily net assets
attributable in the aggregate to the Fund's Institutional and
Administrative Class shares):
13 PIMCO Funds: Multi-Manager Series
<PAGE>
Sub- The Sub-Adviser has full investment discretion and makes all
Adviser determinations with respect to the investment of a Fund's assets.
The following provides summary information about the Sub-Adviser,
including its investment specialty.
<TABLE>
<CAPTION>
Sub-Adviser Investment Specialty
-----------------------------------------------------------------
<S> <C>
NFJ Investment Group Value stocks that NFJ believes are undervalued
2121 San Jacinto, and/or offer above-average dividend yields
Suite 1840
Dallas, TX 75201
</TABLE>
The following provides additional information about the Sub-
Adviser and the individual Portfolio Manager(s) who have or share
primary responsibility for managing the Funds' investments.
An affiliated sub-partnership of PIMCO Advisors, NFJ provides
advisory services to mutual funds and institutional accounts. NFJ
Investment Group, Inc., the predecessor investment adviser to NFJ,
commenced operations in 1989. Accounts managed by NFJ had combined
assets as of September 30, 2000 of approximately $1.8 billion.
The following individuals at NFJ share primary responsibility for
the noted Funds.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since Recent Professional Experience
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
NFJ Equity Income Chris Najork 2000* Managing Director and founding
partner of NFJ. He has 30 years'
experience encompassing equity
research and portfolio management.
Prior to the formation of NFJ in
1989, he was a senior vice
president, senior portfolio manager
and analyst at NationsBank, which he
joined in 1974.
Benno J. Fischer 2000* Managing Director and founding
partner of NFJ. He has 32 years'
experience in portfolio management,
investment analysis and research.
Prior to the formation of NFJ in
1989, he was chief investment
officer (institutional and fixed
income), senior vice president and
senior portfolio manager at
NationsBank, which he joined in
1971. Prior to joining NationsBank,
Mr. Fischer was a securities analyst
at Chase Manhattan Bank and Clark,
Dodge.
NFJ Value Messrs. Najork and 2000* See above.
Fischer
Paul A. Magnuson 2000* Principal at NFJ. He is a Portfolio
Manager and Senior Research Analyst
with 14 years' experience in equity
analysis and portfolio management.
Prior to joining NFJ in 1992, he was
an assistant vice president at
NationsBank, which he joined in
1985. Within the Trust Investment
Qualitative Services Division of
NationsBank, he was responsible for
equity analytics and structured fund
management.
NFJ Value 25 Messrs. Najork and 2000* See above.
Fischer
E. Clifton Hoover, 2000* Principal at NFJ. He is a Portfolio
Jr. Manager with 13 years' experience in
financial analysis and portfolio
management. Prior to joining NFJ in
1997, he was associated with Credit
Lyonnais from 1991 to 1997, where he
served as a vice president and was
responsible for the financial
analysis and portfolio management of
a diversified portfolio. He began
his career as a financial analyst
with NationsBank in 1985.
</TABLE>
-------
*Since inception of the Fund
Distributor The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stamford, Connecticut 06902, is a broker-
dealer registered with the Securities and Exchange Commission.
Adviser/ Shareholders of each Fund have approved a proposal permitting
Sub- PIMCO Advisors to enter into new or amended sub-advisory
Adviser agreements with one or more sub-advisers with respect to each Fund
Relation- without obtaining shareholder approval of such agreements, subject
ship to the conditions of an exemptive order that has been granted by
the Securities and Exchange Commission. One of the conditions
requires the Board of Trustees to approve any such agreement. In
addition, the exemptive order prohibits PIMCO Advisors from
entering into sub-advisory agreements with affiliates of PIMCO
Advisors without shareholder approval, unless those affiliates are
substantially wholly-owned by PIMCO Advisors. PIMCO Advisors has
the ultimate responsibility to to oversee the Sub-Adviser and to
recommend its hiring, termination and replacement.
Prospectus 14
<PAGE>
Investment Options --
Institutional Class and Administrative Class Shares
The Trust offers investors Institutional Class and Administrative
Class shares of the Funds in this Prospectus.
The Trust does not charge any sales charges (loads) or other fees
in connection with purchases, sales (redemptions) or exchanges of
Institutional Class or Administrative Class shares. See
"Purchases, Redemptions and Exchanges" below.
Administrative Class shares are generally subject to a higher
level of operating expenses than Institutional Class shares due to
the additional service and/or distribution fees paid by
Administrative Class shares as described below. Therefore,
Institutional Class shares will generally pay higher dividends and
have a more favorable investment return than Administrative Class
shares.
. Service and Distribution (12b-1) Fees--Administrative Class
Shares. The Trust has adopted both an Administrative Services Plan
and a Distribution Plan for the Administrative Class shares of
each Fund. Each Plan has been adopted in accordance with the
requirements of Rule 12b-1 under the Investment Company Act of
1940 and is administered in accordance with that rule. However,
shareholders do not have the voting rights set forth in Rule 12b-1
with respect to the Administrative Services Plan.
Each Plan allows the Funds to use its Administrative Class assets
to reimburse financial intermediaries that provide services
relating to Administrative Class shares. The Distribution Plan
permits reimbursement for expenses in connection with the
distribution and marketing of Administrative Class shares and/or
the provision of shareholder services to Administrative Class
shareholders. The Administrative Services Plan permits
reimbursement for services in connection with the administration
of plans or programs that use Administrative Class shares of the
Funds as their funding medium and for related expenses.
In combination, the Plans permit a Fund to make total
reimbursements at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to its Administrative Class
shares. The same entity may not receive both distribution and
administrative services fees with respect to the same
Administrative Class assets, but may receive fees under each Plan
with respect to separate assets. Because these fees are paid out
of a Fund's Administrative Class assets on an ongoing basis, over
time they will increase the cost of an investment in
Administrative Class shares and may cost an investor more than
other types of sales charges.
. Arrangements with Service Agents. Institutional Class and
Administrative Class shares of the Funds may be offered through
certain brokers and financial intermediaries ("service agents")
that have established a shareholder servicing relationship with
the Trust on behalf of their customers. The Trust pays no
compensation to such entities other than service and/or
distribution fees paid with respect to Administrative Class
shares. Service agents may impose additional or different
conditions than the Trust on purchases, redemptions or exchanges
of Fund shares by their customers. Service agents may also
independently establish and charge their customers transaction
fees, account fees and other amounts in connection with purchases,
sales and redemptions of Fund shares in addition to any fees
charged by the Trust. These additional fees may vary over time and
would increase the cost of the customer's investment and lower
investment returns. Each service agent is responsible for
transmitting to its customers a schedule of any such fees and
information regarding any additional or different conditions
regarding purchases, redemptions and exchanges. Shareholders who
are customers of service agents should consult their service
agents for information regarding these fees and conditions.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
Purchases, Redemptions and Exchanges
Purchasing Investors may purchase Institutional Class and Administrative
Shares Class shares of the Funds at the relevant net asset value ("NAV")
of that class without a sales charge or other fee.
Institutional Class shares are offered primarily for direct
investment by investors such as pension and profit sharing plans,
employee benefit trusts, endowments, foundations, corporations and
high net worth individuals. Institutional Class shares may also be
offered through certain financial intermediaries that charge their
customers transaction or other fees with respect to their
customers' investments in the Funds.
Administrative Class shares are offered primarily through
employee benefit plan alliances, broker-dealers and other
intermediaries, and each Fund pays service and/or distribution
fees to these entities for services they provide to Administrative
Class shareholders.
Pension and profit-sharing plans, employee benefit trusts and
employee benefit plan alliances and "wrap account" programs
established with broker-dealers or financial intermediaries may
purchase shares of either class only if the plan or program for
which the shares are being acquired will maintain an omnibus or
pooled account for each Fund and will not require a Fund to pay
any type of administrative payment per participant account to any
third party.
. Investment Minimums. The minimum initial investment for shares
of either class is $5 million, except that the minimum initial
investment for a registered investment adviser purchasing
Institutional Class shares for its clients through omnibus
accounts is $250,000 per Fund. At the discretion of PIMCO
Advisors, the minimum initial investment may be waived for
Institutional or Administrative Class shares offered to clients of
PIMCO Advisors, NFJ and their affiliates. In addition, the minimum
initial investment does not apply to Institutional Class shares
offered through fee-based programs sponsored and maintained by a
registered broker-dealer and approved by the Distributor in which
each investor pays an asset based fee at an annual rate of at
least 0.50% of the assets in the account to a financial
intermediary for investment advisory and/or administrative
services.
The Trust and the Distributor may waive the minimum initial
investment for other categories of investors at their discretion.
. Timing of Purchase Orders and Share Price Calculations. A
purchase order received by the Trust's transfer agent, National
Financial Data Services (the "Transfer Agent"), prior to the close
of regular trading (normally 4:00 p.m., Eastern time) on the New
York Stock Exchange, on a day the Trust is open for business,
together with payment made in one of the ways described below,
will be effected at that day's net asset value ("NAV"). An order
received after the close of regular trading on the New York Stock
Exchange will be effected at the NAV determined on the next
business day. However, orders received by certain retirement plans
and other financial intermediaries on a business day prior to the
close of regular trading on the New York Stock Exchange and
communicated to the Transfer Agent prior to 9:00 a.m., Eastern
time, on the following business day will be effected at the NAV
determined on the prior business day. The Trust is "open for
business" on each day the New York Stock Exchange is open for
trading, which excludes the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Purchase orders will be accepted only on days on
which the Trust is open for business.
. Initial Investment. Investors may open an account by
completing and signing a Client Registration Application and
mailing it to PIMCO Funds at 840 Newport Center Drive, Suite 300,
Newport Beach, California 92660. A Client Registration Application
may be obtained by calling 1-800-927-4648.
Prospectus 16
<PAGE>
Except as described below, an investor may purchase Institutional
Class and Administrative Class shares only by wiring federal funds
to the Transfer Agent, National Financial Data Services, 330 West
9th Street, 4th Floor, Kansas City, Missouri 64105. Before wiring
federal funds, the investor must telephone the Trust at 1-800-927-
4648 to receive instructions for wire transfer and must provide
the following information: name of authorized person, shareholder
name, shareholder account number, name of Fund and share class,
amount being wired, and wiring bank name.
An investor may purchase shares without first wiring federal
funds if the proceeds of the investment are derived from an
advisory account the investor maintains with PIMCO Advisors or one
of its affiliates or from an investment by broker-dealers,
institutional clients or other financial intermediaries which have
established a shareholder servicing relationship with the Trust on
behalf of their customers.
. Additional Investments. An investor may purchase additional
Institutional Class and Administrative Class shares of the Funds
at any time by calling the Trust and wiring federal funds to the
Transfer Agent as outlined above.
. Other Purchase Information. Purchases of a Fund's
Institutional Class and Administrative Class shares will be made
in full and fractional shares. In the interest of economy and
convenience, certificates for shares will not be issued.
The Trust and the Distributor each reserves the right, in its
sole discretion, to suspend the offering of shares of the Funds or
to reject any purchase order, in whole or in part, when, in the
judgment of management, such suspension or rejection is in the
best interests of the Trust.
An investor should invest in the Funds for long-term investment
purposes only. The Trust, PIMCO Advisors and NFJ each reserve the
right to restrict purchases of Fund shares (including exchanges)
when a pattern of frequent purchases and sales made in response to
short-term fluctuations in share price appears evident. Notice of
any such restrictions, if any, will vary according to the
particular circumstances.
Institutional Class and Administrative Class shares of the Trust
may not be qualified or registered for sale in all states.
Investors should inquire as to whether shares of a particular Fund
are available for offer and sale in the investor's state of
residence. Shares of the Trust may not be offered or sold in any
state unless registered or qualified in that jurisdiction or
unless an exemption from registration or qualification is
available.
Subject to the approval of the Trust, an investor may purchase
shares of a Fund with liquid securities that are eligible for
purchase by the Fund (consistent with the Fund's investment
policies and restrictions) and that have a value that is readily
ascertainable in accordance with the Trust's valuation policies.
These transactions will be effected only if PIMCO Advisors or NFJ
intends to retain the security in the Fund as an investment.
Assets purchased by a Fund in such a transaction will be valued in
generally the same manner as they would be valued for purposes of
pricing the Fund's shares, if such assets were included in the
Fund's assets at the time of purchase. The Trust reserves the
right to amend or terminate this practice at any time.
. Retirement Plans. Shares of the Funds are available for
purchase by retirement and savings plans, including Keogh plans,
401(k) plans, 403(b) custodial accounts, and Individual Retirement
Accounts. The administrator of a plan or employee benefits office
can provide participants or employees with detailed information on
how to participate in the plan and how to elect a Fund as an
investment option. Participants in a retirement or savings plan
may be permitted to elect different investment options, alter the
amounts contributed to the plan, or change how contributions are
allocated among investment options in accordance with the plan's
specific provisions. The plan administrator or employee benefits
office should be consulted for
17 PIMCO Funds: Multi-Manager Series
<PAGE>
details. For questions about participant accounts, participants
should contact their employee benefits office, the plan
administrator, or the organization that provides recordkeeping
services for the plan. Investors who purchase shares through
retirement plans should be aware that plan administrators may
aggregate purchase and redemption orders for participants in the
plan. Therefore, there may be a delay between the time the
investor places an order with the plan administrator and the time
the order is forwarded to the Transfer Agent for execution.
Redeeming . Redemptions by Mail. An investor may redeem (sell)
Shares Institutional Class and Administrative Class shares by submitting
a written request to PIMCO Funds at 840 Newport Center Drive,
Suite 300, Newport Beach, California 92660. The redemption request
should state the Fund from which the shares are to be redeemed,
the class of shares, the number or dollar amount of the shares to
be redeemed and the account number. The request must be signed
exactly as the names of the registered owners appear on the
Trust's account records, and the request must be signed by the
minimum number of persons designated on the Client Registration
Application that are required to effect a redemption.
. Redemptions by Telephone or Other Wire Communication. An
investor that elects this option on the Client Registration
Application (or subsequently in writing) may request redemptions
of shares by calling the Trust at 1-800-927-4648, by sending a
facsimile to 1-949-725-6830, by sending an e-mail to
[email protected], or by other means of wire
communication. Investors should state the Fund and class from
which the shares are to be redeemed, the number or dollar amount
of the shares to be redeemed, the account number and the signature
(which may be an electronic signature) of an authorized signatory.
Redemption requests of an amount of $10 million or more may be
initiated by telephone, wire or e-mail, but must be confirmed in
writing by an authorized party prior to processing.
In electing a telephone redemption, the investor authorizes
Pacific Investment Management Company and the Transfer Agent to
act on telephone instructions from any person representing himself
to be the investor, and reasonably believed by Pacific Investment
Management Company or the Transfer Agent to be genuine. Neither
the Trust nor the Transfer Agent may be liable for any loss, cost
or expense for acting on instructions (whether in writing or by
telephone) believed by the party receiving such instructions to be
genuine and in accordance with the procedures described in this
Prospectus. Shareholders should realize that by electing the
telephone, wire or e-mail redemption option, they may be giving up
a measure of security that they might have if they were to redeem
their shares in writing. Furthermore, interruptions in service may
mean that a shareholder will be unable to effect a redemption by
telephone or e-mail when desired. The Transfer Agent also provides
written confirmation of transactions initiated by telephone as a
procedure designed to confirm that telephone instructions are
genuine (written confirmation is also provided for redemption
requests received in writing or via e-mail). All telephone
transactions are recorded, and Pacific Investment Management
Company or the Transfer Agent may request certain information in
order to verify that the person giving instructions is authorized
to do so. The Trust or Transfer Agent may be liable for any losses
due to unauthorized or fraudulent telephone transactions if it
fails to employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. All redemptions, whether
initiated by letter or telephone, will be processed in a timely
manner, and proceeds will be forwarded by wire in accordance with
the redemption policies of the Trust detailed below. See "Other
Redemption Information."
Shareholders may decline telephone exchange or redemption
privileges after an account is opened by instructing the Transfer
Agent in writing at least seven business days prior to the date
the instruction is to be effective. Shareholders may experience
delays in exercising telephone redemption privileges during
periods of abnormal market activity. During periods of volatile
economic or market conditions, shareholders may wish to consider
transmitting redemption orders by telegram, facsimile or overnight
courier.
Prospectus 18
<PAGE>
Defined contribution plan participants may request redemptions by
contacting the employee benefits office, the plan administrator or
the organization that provides recordkeeping services for the
plan.
. Other Redemption Information. Redemption requests for Fund
shares are effected at the NAV per share next determined after
receipt of a redemption request by the Trust or its designee. The
request must properly identify all relevant information, such as
account number, redemption amount (in dollars or shares) and the
Fund name, and must be executed or initialed by the appropriate
signatories. A redemption request received by the Trust or its
designee prior to the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m., Eastern time), on a day the
Trust is open for business, is effective on that day. A redemption
request received after that time becomes effective on the next
business day.
Redemption proceeds will ordinarily be wired to the investor's
bank within three business days after the redemption request, but
may take up to seven business days. Redemption proceeds will be
sent by wire only to the bank name designated on the Client
Registration Application. The Trust may suspend the right of
redemption or postpone the payment date at times when the New York
Stock Exchange is closed, or during certain other periods as
permitted under the federal securities laws.
For shareholder protection, a request to change information
contained in an account registration (for example, a request to
change the bank designated to receive wire redemption proceeds)
must be received in writing, signed by the minimum number of
persons designated on the Client Registration Application that are
required to effect a redemption, and accompanied by a signature
guarantee from any eligible guarantor institution, as determined
in accordance with the Trust's procedures. Shareholders should
inquire as to whether a particular institution is an eligible
guarantor institution. A signature guarantee cannot be provided by
a notary public. In addition, corporations, trusts, and other
institutional organizations are required to furnish evidence of
the authority of the persons designated on the Client Registration
Application to effect transactions for the organization.
Due to the relatively high cost of maintaining small accounts,
the Trust reserves the right to redeem Institutional Class and
Administrative Class shares in any account for their then-current
value (which will be promptly paid to the investor) if at any
time, due to redemption by the investor, the shares in the account
do not have a value of at least $100,000. A shareholder will
receive advance notice of a mandatory redemption and will be given
at least 30 days to bring the value of its account up to at least
$100,000.
The Trust agrees to redeem shares of each Fund solely in cash up
to the lesser of $250,000 or 1% of the Fund's net assets during
any 90-day period for any one shareholder. In consideration of the
best interests of the remaining shareholders, the Trust reserves
the right to pay any redemption proceeds exceeding this amount in
whole or in part by a distribution in kind of securities held by a
Fund in lieu of cash. Except for Funds with a tax-efficient
management strategy, it is highly unlikely that shares would ever
be redeemed in kind. When shares are redeemed in kind, the
redeeming shareholder should expect to incur transaction costs
upon the disposition of the securities received in the
distribution.
Redemptions of Fund shares may be suspended when trading on the
New York Stock Exchange is restricted or during an emergency which
makes it impracticable for the Funds to dispose of their
securities or to determine fairly the value of their net assets,
or during any other period as permitted by the Securities and
Exchange Commission for the protection of investors. Under these
and other unusual circumstances, the Trust may suspend redemptions
or postpone payment for more than seven days, as permitted by law.
Exchange An investor may exchange Institutional Class or Administrative
Privilege Class shares of a Fund described in this prospectus for shares of
the same class of any other Fund described in this prospectus
based on the respective NAVs of the shares involved. An exchange
may be made by following the redemption procedure described
19 PIMCO Funds: Multi-Manager Series
<PAGE>
above under "Redemptions by Mail" or, if the investor has elected
the telephone redemption option, by calling the Trust at 1-800-
927-4648.
An investor may exchange shares only with respect to Funds or
other eligible series that are registered in the investor's state
of residence or where an exemption from registration is available.
In addition, an exchange is generally a taxable event which will
generate capital gains or losses, and special rules may apply in
computing tax basis when determining gain or loss. See "Tax
Consequences" in this Prospectus and "Taxation" in the Statement
of Additional Information.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Fund and its shareholders. In particular, a pattern of
exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Fund. The Trust reserves the right to impose additional
restrictions on exchanges at any time, although it will attempt to
give shareholders 30 days' prior notice whenever it is reasonably
able to do so.
How Fund Shares Are Priced
The net asset value ("NAV") of a Fund's Institutional and
Administrative Class shares is determined by dividing the total
value of a Fund's portfolio investments and other assets
attributable to that class, less any liabilities, by the total
number of shares outstanding of that class.
For purposes of calculating the NAV, portfolio securities and
other assets for which market quotes are available are stated at
market value. Market value is generally determined on the basis of
last reported sales prices, or if no sales are reported, based on
quotes obtained from a quotation reporting system, established
market makers, or pricing services. Certain securities or
investments for which daily market quotes are not readily
available may be valued, pursuant to procedures 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, 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 or persons acting at their direction 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.
Prospectus 20
<PAGE>
Under certain circumstances, the per share NAV of the
Administrative Class shares of the Funds may be lower than the per
share NAV of the Institutional Class shares as a result of the
daily expense accruals of the service and/or distribution fees
paid by Administrative Class shares. Generally, for Funds that pay
income dividends, those dividends are expected to differ over time
by approximately the amount of the expense accrual differential
between the two classes.
Fund Distributions
Each Fund distributes substantially all of its net investment
income to shareholders in the form of dividends. A shareholder
begins earning dividends on Fund shares the day after the Trust
receives the shareholder's purchase payment. Dividends paid by
each Fund with respect to each class of shares are calculated in
the same manner and at the same time, but dividends on
Administrative Class shares are expected to be lower than
dividends on Institutional Class shares as a result of the service
and/or distribution fees applicable to Administrative Class
shares.
The NFJ Equity Income and NFJ Value Funds each intend to declare
and distribute income dividends to shareholders of record at least
quarterly. The NFJ Value 25 Fund intends to declare and distribute
income dividends to shareholders of record at least annually. In
addition, each Fund distributes any net capital gains it earns
from the sale of portfolio securities to shareholders no less
frequently than annually. Net short-term capital gains may be paid
more frequently.
A Fund's dividend and capital gain distributions with respect to
a particular class of shares will automatically be reinvested in
additional shares of the same class of the Fund at NAV unless the
shareholder elects to have the distributions paid in cash. A
shareholder may elect to have distributions paid in cash on the
Client Registration Application or by submitting a written
request, signed by the appropriate signatories, indicating the
account number, Fund name(s) and wiring instructions. Shareholders
do not pay any sales charges or other fees on the receipt of
shares received through the reinvestment of Fund distributions.
For further information on distribution options, please contact
the Trust at 1-800-927-4648.
Tax Consequences
. Taxes on Fund Distributions. A shareholder subject to U.S.
federal income tax will be subject to tax on Fund distributions
whether they are paid in cash or reinvested in additional shares
of the Funds. For federal income tax purposes, Fund distributions
will be taxable to the shareholder as either ordinary income or
capital gains.
Fund dividends (i.e., distributions of investment income) are
taxable to shareholders as ordinary income. Federal taxes on Fund
distributions of gains are determined by how long the Fund owned
the investments that generated the gains, rather than how long the
shareholder owned the shares. Distributions of gains from
investments that a Fund owned for more than 12 months will
generally be taxable to shareholders as capital gains.
Distributions of gains from investments that the Fund owned for 12
months or less will generally be taxable as ordinary income.
Fund distributions are taxable to shareholders even if they are
paid from income or gains earned by a Fund prior to the
shareholder's investment and thus were included in the price paid
for the shares. For example, a shareholder who purchases shares on
or just before the record date of a Fund distribution will pay
full price for the shares and may receive a portion of his or her
investment back as a taxable distribution.
21 PIMCO Funds: Multi-Manager Series
<PAGE>
. Taxes on Redemptions or Exchanges of Shares. Any gain
resulting from the sale of Fund shares will generally be subject
to federal income tax. When a shareholder exchanges shares of a
Fund for shares of another series, the transaction generally will
be treated as a sale of the Fund shares for these purposes, and
any gain on those shares will generally be subject to federal
income tax.
. A Note on Foreign Investments. A Fund's investments in foreign
securities, if any, 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; the consequences
under other tax laws may differ. Shareholders should consult their
tax advisors as to the possible application of foreign, state and
local income tax laws to Fund dividends and capital distributions.
Please see the Statement of Additional Information for additional
information regarding the tax aspects of investing in the Funds.
Characteristics and Risks of
Securities and Investment Techniques
This section provides additional information about some of the
principal investments and related risks of the Funds identified
under "Summary Information" above. It also describes
characteristics and risks of additional securities and investment
techniques that are not necessarily principal investments or
strategies but may be 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 the Funds' Adviser and Sub-Adviser and the individual portfolio
managers. Please see "Investment Objectives and Policies" in the
Statement of Additional Information for more detailed information
about the securities and investment techniques described in this
section and about other strategies and techniques that may be used
by the Funds.
Fixed Fixed income securities are obligations of the issuer to make
Income payments of principal and/or interest on future dates, and include
Securities corporate and government bonds, notes, certificates of deposit,
and commercial paper, convertible securities and mortgage-backed and
Defensive other asset-backed securities.
Strategies
Under normal circumstances, the Funds intend to be fully invested
in common stocks (aside from cash management practices), except
that each of the Funds may temporarily hold up to 10% of its
assets in cash and cash equivalents for defensive purposes in
response to unfavorable market and other conditions. These
temporary defensive strategies would be inconsistent with the
investment objective and principal investment strategies of each
of the Funds and may adversely affect a Fund's ability to achieve
its investment objective.
Companies Each of the Funds may invest in securities of companies with
With Smallermarket capitalizations that are small compared to other publicly
Market traded companies. The NFJ Value 25 Fund has significant exposure
Capitaliza- to the risks described below because it invests primarily in
tions companies with medium-sized market capitalization, which are
smaller and generally less well-known or seasoned 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
Prospectus 22
<PAGE>
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.
Intial The Funds may purchase securities in initial public offerings
Public (IPOs). These securities are subject to many of the same risks of
Offerings 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. At any particular time or from time to time, a Fund may
not be able to invest in securities issued in IPOs, or invest to
the extent desired, because, for example, only a small portion (if
any) of the securities being offered in an IPO may be made
available to the Fund. In addition, under certain market
conditions a relatively small number of companies may issue
securities in IPOs. Similarly, as the number of Funds to which IPO
securities are allocated increases, the number of securities
issued to any one Fund may decrease. The investment performance of
a Fund during periods when it is unable to invest significantly or
at all in IPOs may be lower than during periods when the Fund is
able to do so. In addition, as a Fund increases in size, the
impact of IPOs on the Fund's performance will generally decrease.
Foreign Each of the Funds may invest in foreign securities, including
(non- American Depository Receipts (ADRs). ADRs are dollar-denominated
U.S.) receipts issued generally by domestic banks and representing the
Securities 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.
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.
23 PIMCO Funds: Multi-Manager Series
<PAGE>
Emerging Each of the Funds may invest in securities of issuers based in or
Market that trade principally in countries with developing (or "emerging
Securities market") economies. Investing in emerging market securities
imposes risks different from, or greater than, risks of investing
in domestic securities or in foreign, developed countries. These
risks include: smaller market capitalization of securities
markets, which may suffer periods of relative illiquidity;
significant price volatility; restrictions on foreign investment;
and possible repatriation of investment income and capital. In
addition, foreign investors may be required to register the
proceeds of sales, and future economic or political crises could
lead to price controls, forced mergers, expropriation or
confiscatory taxation, seizure, nationalization or the creation of
government monopolies. The currencies of emerging market countries
may experience significant declines against the U.S. dollar, and
devaluation may occur subsequent to investments in these
currencies by a Fund. Inflation and rapid fluctuations in
inflation rates have had, and may continue to have, negative
effects on the economies and securities markets of certain
emerging market countries.
Additional risks of emerging market securities may include:
greater social, economic and political uncertainty and
instability; more substantial governmental involvement in the
economy; less governmental supervision and regulation;
unavailability of currency hedging techniques; companies that are
newly organized and small; differences in auditing and financial
reporting standards, which may result in unavailability of
material information about issuers; and less developed legal
systems. In addition, emerging securities markets may have
different clearance and settlement procedures, which may be unable
to keep pace with the volume of securities transactions or
otherwise make it difficult to engage in such transactions.
Settlement problems may cause a Fund to miss attractive investment
opportunities, hold a portion of its assets in cash pending
investment, or be delayed in disposing of a portfolio security.
Such a delay could result in possible liability to a purchaser of
the security.
Special Risks of Investing in Russian and Other Eastern European
Securities. Each of the Funds may invest a portion of its assets
in securities of issuers located in Russia and in other Eastern
European countries. While investments in securities of such
issuers are subject generally to the same risks associated with
investments in other emerging market countries described above,
the political, legal and operational risks of investing in Russian
and other Eastern European issuers, and of having assets custodied
within these countries, may be particularly acute. A risk of
particular note with respect to direct investment in Russian
securities is the way in which ownership of shares of companies is
normally recorded. When a Fund invests in a Russian issuer, it
will normally receive a "share extract," but that extract is not
legally determinative of ownership. The official record of
ownership of a company's share is maintained by the company's
share registrar. Such share registrars are completely under the
control of the issuer, and investors are provided with few legal
rights against such registrars.
Foreign A Fund that invests directly in foreign currencies or in
Currencies securities that trade in, and receive revenues in, foreign
currencies will be subject to currency risk. 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, uncertainty surrounds the introduction
of the euro (a common currency unit for the European Union) and
the effect it may have on the value of European currencies as well
as 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.
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
Prospectus 24
<PAGE>
stock at either a stated price or a stated rate. The price of a
convertible security will normally vary in some proportion to
changes in the price of the underlying common stock because of
this conversion or exercise feature. However, the value of a
convertible security may not increase or decrease as rapidly as
the underlying common stock. A convertible security will normally
also provide income and is subject to interest rate risk. While
convertible securities generally offer lower interest or dividend
yields than non-convertible fixed income securities of similar
quality, their value tends to increase as the market value of the
underlying stock increases and to decrease when the value of the
underlying stock decreases. Also, a Fund may be forced to convert
a security before it would otherwise choose, which may have an
adverse effect on the Fund's ability to achieve its investment
objective.
Credit The Funds may invest in securities based on their credit ratings
Ratings assigned by rating agencies such as Moody's Investors Service,
and Inc. ("Moody's") and Standard & Poor's Ratings Services ("S&P").
Unrated Moody's, S&P and other rating agencies are private services that
Securities provide ratings of the credit quality of fixed income securities,
including convertible securities. The Appendix to the Statement of
Additional Information describes the various ratings assigned to
fixed income securities by Moody's and S&P. Ratings assigned by a
rating agency are not absolute standards of credit quality and do
not evaluate market risk. Rating agencies may fail to make timely
changes in credit ratings and an issuer's current financial
condition may be better or worse than a rating indicates. A Fund
will not necessarily sell a security when its rating is reduced
below its rating at the time of purchase. PIMCO Advisors and NFJ
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,
25 PIMCO Funds: Multi-Manager Series
<PAGE>
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. Repurchase agreements maturing in more than
seven days are considered illiquid securities.
Reverse Each Fund may enter into reverse repurchase agreements, subject to
Repurchase the Fund's limitations on borrowings. A reverse repurchase
Agreements agreement involves the sale of a security by a Fund and its
and Other agreement to repurchase the instrument at a specified time and
Borrowings price, and may be considered a form of borrowing for some
purposes. A Fund will segregate assets determined to be liquid by
PIMCO Advisors or NFJ 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 the
Fund, and transactions in illiquid securities may entail
registration expenses and other transaction costs that are higher
than those for transactions in liquid securities. The term
"illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of
business at approximately the amount at which a Fund has valued
the securities. Please see "Investment Objectives and Policies" in
the Statement of Additional Information for a listing of various
securities that are generally considered to be illiquid for these
purposes. Restricted securities, i.e., securities subject to legal
or contractual restrictions on resale, may be illiquid. However,
some restricted securities (such as securities issued pursuant to
Rule 144A under the Securities Act of 1933 and certain commercial
paper) may be treated as liquid, although they may be less liquid
than registered securities traded on established secondary
markets.
Investment Each of the Funds may invest up to 5% of its assets in securities
in Other of other investment companies, such as closed-end management
Investment investment companies, or in other pooled investment vehicles. As a
Companies shareholder of an investment company, a Fund may indirectly bear
service and other fees which are in addition to the fees the Fund
pays its service providers.
Portfolio The length of time a Fund has held a particular security is not
Turnover 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. 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.
Prospectus 26
<PAGE>
Changes The investment objective of each Fund may be changed by the Board
in of Trustees without shareholder approval. Unless otherwise stated
Investment in the Statement of Additional Information, all investment
Objectives policies of the Funds may be changed by the Board of Trustees
and without shareholder approval. If there is a change in a Fund's
Policies 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.
In addition to the risks described under "Summary of Principal
New and Risks" above and in this section, the Funds are newly formed and
Smaller- therefore have limited or no performance histories for investors
Sized to evaluate. Also, it is possible that the Funds may invest in
Funds securities offered in initial public offerings and other types of
transactions (such as private placements) which, because of the
Funds' size, may have a disproportionate impact on the Funds'
performance results. The Funds would not necessarily have achieved
the same performance results if their 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.
27 PIMCO Funds: Multi-Manager Series
<PAGE>
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Prospectus 28
<PAGE>
Financial Highlights
The financial highlights table is inteded to help you understand
the financial performance of Institutional Class and
Administrative Class 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 a particular class of shares of a Fund, assuming
reinvestment of all dividends and distributions. This information
has been audited by PricewaterhouseCoopers LLP, whose report,
along with each Fund's financial statements, are included in the
Trust's annual report to shareholders. The annual report is
incorporated by reference in the Statement of Additional
Information and is available free of charge upon request from the
Distributor. The NFJ Value 25 Fund did not have Institutional
Class and Administrative Class shares outstanding during the
periods shown.
<TABLE>
<CAPTION>
Dividends
Net Asset Net Net Realized/ Total Dividends in Excess
Value Investment Unrealized Income from from Net of Net
Year or Beginning Income Gain (Loss) on Investment Investment Investment
Period Ended of Period (Loss) Investments Operations Income Income
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
NFJ Equity
Income Fund
Institutional
Class
05/08/00 -
06/30/00 $10.51 $0.06(a) $(0.66)(a) $(0.60) $(0.03) $0.00
Administrative
Class
05/08/00 -
06/30/00 10.50 0.07(a) (0.68)(a) (0.61) (0.02) 0.00
NFJ Value Fund
Institutional
Class
05/08/00 -
06/30/00 $11.22 $0.07(a) $(0.39)(a) $(0.32) $(0.05) $0.00
</TABLE>
-------
*Annualized
(a)Per share amounts based on average number of shares outstanding during the
period.
29 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Fund Net Ratio of Net
Distributions Distributions Reimbursement Asset Ratio of Investment
of Net in Excess of Fee Added to Value Net Assets Expenses to Income (Loss)
Realized Net Realized Total Paid-in- End of Total End of Average Net to Average Portfolio
Capital Gains Capital Gains Distributions Capital Period Return Period (000s) Assets Net Assets Turnover Rate
------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$0.00 $0.00 $(0.03) $0.00 $ 9.88 (5.73)% $24,888 0.70%* 3.81%* 3%
0.00 0.00 (0.02) 0.00 9.87 (5.78) 4,638 0.95* 4.74* 3
$0.00 $0.00 $(0.05) $0.00 $10.85 (2.90)% $ 911 0.70%* 3.94%* 5%
</TABLE>
Prospectus 30
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<PAGE>
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<PAGE>
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Multi- INVESTMENT ADVISER AND ADMINISTRATOR
Manager PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Series 92660
-------------------------------------------------------------------
SUB-ADVISER
NFJ Investment Group, 2121 San Jacinto, Suite 1840, Dallas, TX
75201
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CUSTODIAN
State Street Bank & Trust Co., 801 Pennsylvania, Kansas City, MO
64105
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TRANSFER AGENT
National Financial Data Services, 330 W. 9th Street, 4th Floor,
Kansas City, MO 64105
-------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
-------------------------------------------------------------------
LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
-------------------------------------------------------------------
<PAGE>
The Trust's Statement of Additional Information ("SAI") and annual and
semi-annual reports to shareholders include additional information about the
Funds. The SAI and the financial statements included in the Funds' most recent
annual report to shareholders are incorporated by reference into this
Prospectus, which means they are part of this Prospectus for legal purposes. The
Funds' annual report discusses the market conditions and investment strategies
that significantly affected each Fund's performance during its last fiscal
year.
You may get free copies of any of these materials, request other information
about a Fund, or make shareholder inquiries by calling the Trust at 1-800-927-
4648 or PIMCO Infolink Audio Response Network at 1-800-987-4626, or by writing
to:
PIMCO Funds:
Multi-Manager Series
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
You may review and copy information about the Trust, including its SAI at the
Securities and Exchange Commission's Public Reference Room in Washington, D.C.
You may call the Commission at 1-202-942-8090 for more information about the
operation of the public reference room. You may also access reports and other
information about the Trust on the Commission's Web site at www.sec.gov. You may
get copies of this information, with payment of a duplication fee, by writing
the Public Reference Section of the Commission, Washington, D.C. 20549-6009, or
by e-mailing your request to [email protected]. Reference the Trust's
Investment Company Act file number in your correspondence.
Investment Company Act
File No. 811-6161
Multi-Manager Series
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
PY001.11/00
