<PAGE>
PIMCO Funds Prospectus
Multi-Manager
Series
April 3, 2000
Share Class
D
- --------------------------------------------------------------------------------
GROWTH STOCK FUNDS
Growth Fund
Select Growth Fund
- --------------------------------------------------------------------------------
BLEND STOCK FUNDS
Capital Appreciation Fund
Mid-Cap Fund
- --------------------------------------------------------------------------------
VALUE STOCK FUNDS
Equity Income Fund
Renaissance Fund
Value Fund
- --------------------------------------------------------------------------------
ENHANCED INDEX STOCK FUNDS
Tax-Efficient Equity Fund
- --------------------------------------------------------------------------------
SECTOR-RELATED STOCK FUNDS
Innovation Fund
Global Innovation Fund
This cover is not part of the Prospectus. [LOGO OF PIMCO FUNDS]
<PAGE>
PIMCO Funds Prospectus
PIMCO This Prospectus describes 10 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 December 31, 1999,
Series PIMCO Advisors and its affiliates managed approximately
$261 billion, including assets for 67 of the 200 largest U.S.
corporations.
April 3,
2000
The Prospectus explains what you should know about the Funds
Share before you invest. Please read it carefully.
Class D
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Fund Summaries
Capital Appreciation Fund...................................... 5
Equity Income Fund............................................. 7
Global Innovation Fund......................................... 9
Growth Fund.................................................... 11
Innovation Fund................................................ 13
Mid-Cap Fund................................................... 15
Renaissance Fund............................................... 17
Select Growth Fund............................................. 19
Tax-Efficient Equity Fund...................................... 21
Value Fund..................................................... 23
Summary of Principal Risks....................................... 25
Management of the Funds.......................................... 27
How Fund Shares Are Priced....................................... 30
How to Buy and Sell Shares....................................... 31
Fund Distributions............................................... 33
Tax Consequences................................................. 34
Characteristics and Risks of Securities and Investment
Techniques...................................................... 34
Financial Highlights............................................. 41
</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
- -------------------------------------------------------------------------------------------------------------------------
Blend Stock Capital Appreciation Growth of capital Common stocks of companies with market 60-100
Funds capitalizations of at least $1 billion that
have improving fundamentals and whose stock is
reasonably valued by the market
--------------------------------------------------------------------------------------------------------------
Mid-Cap Growth of capital Common stocks of companies with market 60-100
capitalizations of more than $500 million
(excluding the largest 200 companies) that have
improving fundamentals and whose stock is
reasonably valued by the market
- -------------------------------------------------------------------------------------------------------------------------
Value Stock Equity Income Current income as a Income-producing common stocks of 40-50
Funds primary objective; companies with market capitalizations of
long-term growth of more than $2 billion
capital as a secondary
objective
--------------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of Common stocks of companies with below-average 50-80
capital and income valuations whose business fundamentals are
expected to improve
--------------------------------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of companies with market 40
capital and income capitalizations of more than $10 billion and
below-average valuations whose business
fundamentals are expected to improve
- -------------------------------------------------------------------------------------------------------------------------
Enhanced Index Tax-Efficient Equity Maximum after-tax A broadly diversified portfolio of at least 200 More than
Stock Funds growth of capital common stocks of companies represented in 200
the S&P 500 Index with market capitalizations
of more than $5 billion
- -------------------------------------------------------------------------------------------------------------------------
Sector-Related Innovation Capital appreciation; Common stocks of technology-related 40
Stock Funds no consideration is companies with market capitalizations of more
given to income than $200 million
--------------------------------------------------------------------------------------------------------------
Global Innovation Capital appreciation; Common stocks of U.S. and non-U.S. 30-60
no consideration is technology-related companies with market
given to income capitalizations of more than $200 million.
<CAPTION>
Approximate
Capitalization
Range
- -------------------------------------------------------------------------------------------------------------------------
<S> <C>
Growth Stock At least $5 billion
Funds
--------------------------------------------------------------------------------------------------------------
At least $10 billion
- -------------------------------------------------------------------------------------------------------------------------
Blend Stock At least $1 billion
Funds
--------------------------------------------------------------------------------------------------------------
More than $500 million
(excluding the largest
200 companies)
- -------------------------------------------------------------------------------------------------------------------------
Value Stock More than $2 billion
Funds
--------------------------------------------------------------------------------------------------------------
All capitalizations
--------------------------------------------------------------------------------------------------------------
More than $10 billion
- -------------------------------------------------------------------------------------------------------------------------
Enhanced Index More than $5 billion
Stock Funds
- -------------------------------------------------------------------------------------------------------------------------
Sector-Related More than $200 million
Stock Funds
--------------------------------------------------------------------------------------------------------------
More than $200 million
</TABLE>
Fund The Funds provide a broad range of investment choices. The
Descriptions,following Fund Summaries identify each Fund's investment
Performance objective, principal investments and strategies, principal risks,
and Fees performance information and fees and expenses. A more detailed
"Summary of Principal Risks" describing principal risks of
investing in the Funds begins after the Fund Summaries.
It is possible to lose money on investments in the Funds. An
investment in a Fund is not a deposit of a bank and is not
guaranteed or insured by the Federal Deposit Insurance
Corporation or any other government agency.
3 PIMCO Funds: Multi-Manager Series
<PAGE>
(This page left blank intentionally.)
Prospectus 4
<PAGE>
PIMCO Capital Appreciation Fund
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Larger At least $1
and Seeks growth of capitalization billion
Strategies capital common stocks
Dividend
Fund Category Approximate Frequency
Blend Stocks Number of At least
</TABLE> Holdings annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with larger market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers the 1,000 largest publicly traded
companies (in terms of market capitalization) in the U.S. The team
screens the stocks in this universe for a series of growth
criteria, such as dividend growth, earnings growth, relative
growth of earnings over time (earnings momentum) and the company's
history of meeting earnings targets (earnings surprise), and also
value criteria, such as price-to-earnings, price-to-book and
price-to-cash flow ratios. The team then selects individual stocks
by subjecting the top 10% of the stocks in the screened universe
to a rigorous analyses of company factors, such as strength of
management, competitive industry position, and business prospects,
and financial statement data, such as earnings, cash flows and
profitability. The team may interview company management in making
investment decisions. The Fund's capitalization criteria applies
at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team looks to sell a
stock when it falls below the median ranking, has negative
earnings surprises, or shows poor price performance relative to
all stocks in the Fund's capitalization range or to companies in
the same business sector. A stock may also be sold if its
weighting in the portfolio becomes excessive (normally above 2% of
the Fund's investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities Risk
. Management Risk
. Issuer Risk . Focused Investment Risk
. Value Securities Risk
. Credit Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including the information to its right) and the
Average Annual Total Returns table is based on the performance of
the Fund's Institutional Class shares, which are offered in a
different prospectus. The prior Institutional Class performance
has been adjusted to reflect the actual distribution and/or
service (12b-1) fees and other expenses paid by Class D shares.
Past performance is no guarantee of future results.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Capital Appreciation Fund (continued)
Calendar Year Total Returns -- Class D
[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)
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%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
-------------------------------------------------------------------------
Class D 22.24% 26.99% 19.60%
-------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.75%
-------------------------------------------------------------------------
Lipper Capital Appreciation Fund Average(/2/) 41.82% 22.88% 16.55%
-------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Capital Appreciation Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that have an investment objective of maximum
capital appreciation. It does not take into account sales
charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Administrative Fees" for details.
The Fund intends to treat any fees paid under the plan as
"service fees" for purposes of applicable rules of the
National Association of Securities Dealers, Inc. (the "NASD").
To the extent that such fees are deemed not to be "service
fees," Class D shareholders may, depending on the length of
time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that its not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $112 $350 $606 $1,340
--------------------------------------------------------------------
</TABLE>
Prospectus 6
<PAGE>
PIMCO Equity Income Fund
- --------------------------------------------------------------------------------
<TABLE>
<S> <C>
Principal Investment Fund Focus Approximate Capitalization Range
Investments Objective Income More than $2
and Seeks current producing billion
Strategies income as a common
primary stocks with
objective, and potential
long-term for capital
growth of appreciation
capital as a
secondary
objective
Fund Category Approximate Number Dividend
Value Stocks of Holdings Frequency
40-50 Quarterly
</TABLE>
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in income-producing (e.g.,
dividend-paying) common stocks of companies with market
capitalizations of more than $2 billion at the time of investment.
The Fund may also invest in convertible securities and preferred
stocks.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. From this group of stocks, the Fund
buys approximately 25 stocks with the highest dividend yields. The
portfolio managers then screen the most undervalued companies in
each industry by dividend yield to identify the highest yielding
stocks in each industry. From this group, the Fund buys
approximately 25 additional stocks with the lowest P/E ratios.
In selecting stocks, the portfolio managers consider quantitative
factors such as price momentum (based on changes in stock price
relative to changes in overall market prices), earnings momentum
(based on analysts' earnings per share estimates and revisions to
those estimates), relative dividend yields, valuation relative to
the overall market and trading liquidity. The portfolio managers
may replace a stock when a stock within the same industry group
has a considerably higher dividend yield or lower valuation than
the Fund's current holding.
The Fund may invest up to 15% of its assets in foreign
securities, usually in the form of American Depository Receipts
(ADRs). In response to unfavorable market and other conditions,
the Fund may make temporary investments of some or all of its
assets in high-quality fixed income securities. This would be
inconsistent with the Fund's investment objective and principal
strategies.
- --------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
.Market Risk .Foreign Investment Risk .Credit Risk
.Issuer Risk .Currency Risk .Management Risk
.Value Securities Risk .Interest Rate Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including the information to its right) and the
Average Annual Total Returns table is based on the performance of
the Fund's Institutional Class shares, which are offered in a
different prospectus. The prior Institutional Class performance
has been adjusted to reflect the actual distribution and/or
service (12b-1) fees and other expenses paid by Class D shares.
The Fund is expected to change sub-advisers on or about May 8,
2000. The Fund would not necessarily have achieved the performance
results shown on the next page under its expected new 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
[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)
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%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
------------------------------------------------------------------
Class D -2.22% 17.34% 13.83%
------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.75%
------------------------------------------------------------------
Lipper Equity Income Fund Average(/2/) 4.88% 17.92% 14.28%
------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Equity Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively higher growth of income
through investing 60% or more of their portfolios in equities.
It does not take into account sales charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Administrative Fees" for details.
The Fund intends to treat any fees paid under the plan as
"service fees" for purposes of applicable rules of the
National Association of Securities Dealers, Inc. (the "NASD").
To the extent that such fees are deemed not to be "service
fees," Class D shareholders may, depending on the length of
time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $112 $350 $606 $1,340
--------------------------------------------------------------------
</TABLE>
Prospectus 8
<PAGE>
PIMCO Global Innovation Fund
- --------------------------------------------------------------------------------
Principal Investment Objective
Investments Fund Focus Approximate
and Seeks capital Common stocks of Capitalization Range
Strategies appreciation; no U.S. and non- More than $200 million
consideration is U.S. technology-
given to income related
companies
Fund Category Approximate Number Dividend Frequency
Sector-Related of Holdings At least annually
Stocks 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 will invest
in the securities of issuers located in at least three countries
(one of which may be the United States). Although the Fund
normally invests in securities traded principally in the
securities markets of developed countries, the Fund has no
prescribed limits on geographic asset distribution and may invest
in any foreign securities market in the world, including in
emerging markets. The Fund may utilize foreign currency exchange
contracts and derivative instruments (such as stock index futures
contracts), primarily for risk management or hedging purposes.
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Derivatives Risk .Leveraging Risk
.Issuer Risk .Foreign Investment Risk .Credit Risk
.Growth Securities Risk .Emerging Markets Risk .Management Risk
.Smaller Company Risk .Currency Risk
.Liquidity Risk .Focused Investment Risk
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.
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 D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating Fee Net
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses Waiver(/3/) Expenses(/3/)
---------------------------------------------------------------------------------------
Class D 1.00% 0.25% 0.64% 1.89% 0.04% 1.85%
---------------------------------------------------------------------------------------
</TABLE>
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement
may be Distribution and/or Service (12b-1) Fees. The Fund
will pay a total of 0.85% per year under the administration
agreement regardless of whether a portion or none of the
0.25% authorized under the plan is paid under the plan.
Please see "Management of the Funds--Administrative Fees" for
details. The Fund intends to treat any fees paid under the
plan as "service fees" for purposes of applicable rules of
the National Association of Securities Dealers, Inc. (the
"NASD"). To the extent that such fees are deemed not to be
"service fees," Class D shareholders may, depending on the
length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the NASD.
(2) Other Expenses, which is based on estimated amounts for the
Fund's initial fiscal year, reflects the portion of the
Administrative Fee paid by the class that is not reflected
under Distribution and/or Service (12b-1) Fees, and 0.04%
representing the Fund's organizational expenses as attributed
to the class ("Organizational Expenses").
(3) Net Expenses reflect the effect of a contractual agreement by
PIMCO Advisors to waive, reduce or reimburse its
Administrative Fee for Class D shares in an amount that, in
essence, is equal to the Fund's Organizational Expenses
attributed to the class. Because the Organizational Expenses
will all be accounted for in the Fund's initial fiscal year,
the Fund's reasonable expectation is that the relevant
conditions will not continue after the Fund's fiscal year
ending June 30, 2000.
Examples. The Examples below are intended to help you compare the
cost of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.(/1/)
<TABLE>
<S> <C> <C>
Year 1 Year 3
-----------------------------------
Class D $188 $582
-----------------------------------
</TABLE>
(1) The Examples are based on the Net Expenses shown in the
preceding table.
Prospectus
10
<PAGE>
PIMCO Growth Fund
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Larger Capitalization Range
and growth of capitalization At least $5 billion
Strategies capital; income common stocks
is an incidental
consideration
Fund Category Approximate Number Dividend Frequency
Growth Stocks of Holdings At least annually
35-40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of at least $5 billion at
the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify companies that
are gaining market share, have superior management and possess a
sustainable competitive advantage, such as superior or innovative
products, personnel and distribution systems. The Fund looks to
sell a stock when the portfolio manager believes that its
earnings, market sentiment or relative performance are
disappointing or if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment . Credit Risk
Risk
. Issuer Risk . Currency Risk . Management Risk
. Growth 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, 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.
11PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Growth Fund (continued)
Calendar Year Total Returns -- Class C
[GRAPH]
Annual Return
90 91 92 93 94 95 96 97 98 99
0.29% 41.88% 2.08% 9.32% -0.75% 27.47% 17.52% 21.84% 38.90% 39.83%
Calendar Year End (through 12/31)
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%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C> <C>
Fund Inception
1 Year 5 Years 10 Years (2/24/84)(/3/)
--------------------------------------------------------------------
Class C 38.83% 28.80% 18.77% 19.25%
--------------------------------------------------------------------
Class D 40.86% 29.75% 19.66% 20.14%
--------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 18.21% 18.60%
--------------------------------------------------------------------
Lipper Growth Fund Average(/2/) 29.23% 25.03% 16.48% 16.27%
--------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest in companies with long-term earnings expected to
grow significantly faster than the earnings of the stocks
represented in the major unmanaged stock indexes. It does not
take into account sales charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin
on 2/29/84.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.50% 0.25% 0.40% 1.15%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Administrative Fees" for details.
The Fund intends to treat any fees paid under the plan as
"service fees" for purposes of applicable rules of the
National Association of Securities Dealers, Inc. (the "NASD").
To the extent that such fees are deemed not to be "service
fees," Class D shareholders may, depending on the length of
time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $117 $365 $633 $1,398
--------------------------------------------------------------------
</TABLE>
Prospectus 12
<PAGE>
PIMCO Innovation Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Common stocks Capitalization Range
and Seeks capital of More than $200 million
Strategies appreciation; technology-related
no companies
consideration
is given to
income
Fund Category Approximate Number Dividend Frequency
Sector-Related of Holdings At least annually
Stocks 40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
which utilize new, creative or different, or "innovative,"
technologies to gain a strategic competitive advantage in their
industry, as well as companies that provide and service those
technologies. The Fund identifies its investment universe of
technology-related companies primarily by reference to
classifications made by independent firms, such as Standard &
Poor's (for example, companies classified as "Information
Technology" companies), and by identifying companies that derive a
substantial portion of their revenues from the manufacture, sale
and or/service of technological products. Although the Fund
emphasizes companies which utilize technologies, it is not
required to invest exclusively in companies in a particular
business sector or industry.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify
technology-related companies with well-defined "wealth creating"
characteristics, including superior earnings growth (relative to
companies in the same industry or the market as a whole), high
profitability and consistent, predictable earnings. In addition,
through fundamental research, the portfolio manager seeks to
identify companies that are gaining market share, have superior
management and possess a sustainable competitive advantage, such
as superior or innovative products, personnel and distribution
systems. The Fund looks to sell a stock when the portfolio manager
believes that earnings or market sentiment are disappointing, if
the company does not meet or exceed consensus estimates on
revenues and/or earnings or if an alternative investment is more
attractive.
Although the Fund invests principally in common stocks, the Fund
may also invest in other kinds of equity securities, including
preferred stocks and convertible securities. The Fund may invest
up to 15% of its assets in foreign securities, usually in the form
of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
Principal Risks
.Market Risk .Smaller Company Risk .Currency Risk
.Issuer Risk .Liquidity Risk .Credit Risk
.Focused Investment Risk .Foreign Investment Risk .Management Risk
.Growth Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including the information to its right) and the
Average Annual Total Returns table show performance of the Fund's
Class A shares, which are offered in a different prospectus. The
prior Class A performance has been adjusted to reflect that there
are no sales charges (loads) paid by Class D shares. Prior to
March 6, 1999, the Fund had a different sub-adviser and would not
necessarily have achieved the performance results shown on the
next page under its current investment management arrangements.
Past performance is no guarantee of future results.
13 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Innovation Fund (continued)
Calendar Year Total Returns -- Class D
[GRAPH]
Annual Return
95 96 97 98 99
45.33% 23.60% 9.03% 79.65% 140.42%
Calendar Year End (through 12/31)
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%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/22/94)(/3/)
-----------------------------------------------------------------------------
Class D 140.42% 53.27% 52.89%
-----------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 28.56%
-----------------------------------------------------------------------------
Lipper Science and Technology Fund Average(/2/) 134.77% 40.91% 40.91%
-----------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Science and Technology Fund Average is a total
return performance average of funds tracked by Lipper
Analytical Services, Inc. that invest at least 65% of their
assets in science and technology stocks. It does not take into
account sales charges.
(3) The Fund began operations on 12/22/94. Index comparisons begin
on 12/31/94.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.65% 0.25% 0.40% 1.30%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fees paid under the administration agreement
may be Distribution and/or Service (12b-1) Fees. The Fund will
pay a total of 0.65% per year under the administration
agreement regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Administrative Fees" for details.
The Fund intends to treat any fees paid under the plan as
"service fees" for purposes of applicable rules of the
National Association of Securities Dealers, Inc. (the "NASD").
To the extent that such fees are deemed not to be "service
fees," Class D shareholders may, depending on the length of
time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $132 $412 $713 $1,568
--------------------------------------------------------------------
</TABLE>
Prospectus 14
<PAGE>
PIMCO Mid-Cap Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Medium Capitalization Range
and Seeks growth of capitalization More than $500
Strategies capital common stocks million
(excluding the
largest 200
companies)
Fund Category Approximate Number Dividend Frequency
Blend Stocks of Holdings At least annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of 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 Securities .Focused Investment
Risk 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 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. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including the information to its right) and the
Average Annual Total Returns table show performance of the Fund's
Institutional Class shares, which are offered in a different
prospectus. The prior Institutional Class performance has been
adjusted to reflect the actual distribution and/or service (12b-1)
fees and other expenses paid by Class D shares. Past performance
is no guarantee of future results.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Mid-Cap Fund (continued)
Calendar Year Total Returns -- Class D
[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)
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%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (8/26/91)(/3/)
-----------------------------------------------------------------
Class D 12.52% 22.19% 17.16%
-----------------------------------------------------------------
Russell Mid-Cap Index(/1/) 18.23% 21.85% 17.31%
-----------------------------------------------------------------
Lipper Mid-Cap Fund Average(/2/) 39.38% 23.07% 16.94%
-----------------------------------------------------------------
</TABLE>
(1) The Russell Mid-Cap Index is an unmanaged index of middle
capitalization U.S. stocks. It is not possible to invest
directly in the index.
(2) The Lipper Mid-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $5 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 8/26/91. Index comparisons begin
on 8/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fees paid under the administration agreement
may be Distribution and/or Service (12b-1) Fees. The Fund will
pay a total of 0.65% per year under the administration
agreement regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Administrative Fees" for details.
The Fund intends to treat any fees paid under the plan as
"service fees" for purposes of applicable rules of the
National Association of Securities Dealers, Inc. (the "NASD").
To the extent that such fees are deemed not to be "service
fees," Class D shareholders may, depending on the length of
time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $112 $350 $606 $1,340
--------------------------------------------------------------------
</TABLE>
Prospectus 16
<PAGE>
PIMCO Renaissance Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued Capitalization Range
and Seeks long-term stocks with All
Strategies growth of improving capitalizations
capital and business
income fundamentals
Fund Category Approximate Number Dividend Frequency
of Holdings Quarterly
Value Stocks 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 in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
.Market Risk .Foreign Investment Risk .Credit Risk
.Issuer Risk .Currency Risk .Management Risk
.Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. For periods prior to the inception of the
Fund's Class D shares (4/8/98), performance information shown in
the bar chart (including the information to its right) and the
Average Annual Total Returns table show performance of the Fund's
Class C shares, which are offered in a different prospectus. The
prior Class C performance has been adjusted to reflect that there
are no sales charges (loads) and lower distribution and/or service
(12b-1) fees paid by Class D shares. Prior to March 6, 1999, the
Fund had a different sub-adviser and would not necessarily have
achieved the performance results shown on the next page under its
current investment management arrangements. Past performance is no
guarantee of future results.
The Average Annual Total Returns table also shows estimated
historical performance for Class D shares. Prior to the inception
of Class D shares (4/8/98), the performance is based on the
performance of the Fund's Class C shares, adjusted to reflect that
there are no sales charges and lower distribution and/or service
(12b-1) fees paid by Class D shares. Prior to May 7, 1999, the
Fund had a different sub-adviser and would not necessarily have
achieved the performance results shown on the next page under its
current investment management arrangements. Past performance is no
guarantee of future results.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Renaissance Fund (continued)
Calendar Year Total Returns -- Class D
[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)
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%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C> <C>
Fund Inception
1 Year 5 Years 10 Years (4/18/88)(/3/)
------------------------------------------------------------------
Class D 9.90% 21.86% 14.57% 14.01%
------------------------------------------------------------------
Russell 1000 Value Index(/1/) 7.34% 23.08% 15.60% 16.38%
------------------------------------------------------------------
Lipper Equity Income Fund
Average(/2/) 4.77% 18.02% 12.85% 13.54%
------------------------------------------------------------------
</TABLE>
(1) The Russell 1000 Value Index is an unmanaged index that
measures the performance of companies in the Russell 1000
Index with lower price-to-book ratios and lower forecasted
growth values. It is not possible to invest directly in the
index. The Russell 1000 Value Index replaced the S&P 500 Index
(an unmanaged index of large capitalization common stocks) as
one of the Fund's comparative indexes because PIMCO Advisors
believes the Russell 1000 Value Index is more representative
of the Fund's investment strategies. For periods ended
December 31, 1999, the 1 Year, 5 Years, 10 Years and Fund
Inception average annual total returns of the S&P 500 Index
were 21.04%, 28.56%, 18.21% and 19.06%, respectively. It is
not possible to invest directly in the index.
(2) The Lipper Equity Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively higher growth of income
through investing 60% or more of their portfolios in equities.
It does not take into account sales charges.
(3) The Fund began operations on 4/18/88. Index comparisons begin
on 4/30/88.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.60% 0.25% 0.40% 1.25%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds-- Administrative Fees" for details.
The Fund intends to treat any fees paid under the plan as
"service fees" for purposes of applicable rules of the
National Association of Securities Dealers, Inc. (the "NASD").
To the extent that such fees are deemed not to be "service
fees," Class D shareholders may, depending on the length of
time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $127 $397 $686 $1,511
--------------------------------------------------------------------
</TABLE>
Prospectus 18
<PAGE>
PIMCO Select Growth Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Larger Capitalization Range
and Seeks long-term capitalization At least $10 billion
Strategies growth of common stocks
capital; income
is an incidental
consideration
Fund Category Approximate Number Dividend Frequency
Growth Stocks of Holdings At least annually
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 invest up to 25% of its assets in foreign securities,
usually in the form of American Depository Receipts (ADRs). In
response to unfavorable market and other conditions, the Fund may
make temporary investments of some or all of its assets in high-
quality fixed income securities. This would be inconsistent with
the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
.Market Risk .Growth Securities Risk .Credit Risk
.Issuer Risk .Foreign Investment Risk .Management Risk
.Focused Investment Risk .Currency Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Institutional Class shares, which are offered in a
different prospectus. This is because the Fund did not offer Class
D shares during the periods shown. Although Class D and
Institutional Class shares would have similar annual returns
(because all the Fund's shares represent interests in the same
portfolio of securities), Class D performance would be lower than
Institutional Class performance because of the higher expenses
paid by Class D shares.
The Average Annual Total Returns table also shows estimated
historical performance for Class D shares. The estimated Class D
performance is based on the performance of the Fund's
Institutional Class shares, adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Class D shares.
The performance information on the next page reflects the Fund's
advisory fee level in effect prior to April 1, 2000 (0.57% per
annum); these results would have been lower had the Fund's current
advisory fee level (0.60% per annum) then been in effect. Prior to
July 1, 1999, the Fund had a different sub-adviser and would not
necessarily have achieved the performance results shown on the
next page under its current investment management arrangements. In
addition, the Fund changed its investment objective and policies
on April 1, 2000; the performance results shown on the next page
would not necessarily have been achieved had the Fund's current
objective and policies then been in effect. Past performance is no
guarantee of future results.
PIMCO Funds: Multi-Manager Series
19
<PAGE>
PIMCO Select Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
[GRAPH]
Annual Return
95 96 97 98 99
27.96% 17.95% 25.32% 41.06% 24.27%
Calendar Year End (through 12/31)
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%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/28/94)(/3/)
-----------------------------------------------------------------
Institutional Class 24.27% 27.09% 27.06%
-----------------------------------------------------------------
Class D 23.78% 26.59% 26.57%
-----------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 28.56%
-----------------------------------------------------------------
Lipper Growth Fund Average(/2/) 29.23% 25.03% 25.03%
-----------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest in companies with long-term earnings expected to
grow significantly faster than the earnings of the stocks
represented in the major unmanaged stock indexes. It does not
take into account sales charges.
(3) The Fund began operations on 12/28/94. Index comparisons begin
on 12/31/94.
- --------------------------------------------------------------------------------
Fees and
Expenses These tables describe the fees and expenses you may pay if you buy
of the and hold Class D shares of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
Class D 0.60 0.25% 0.40% 1.25%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Administrative Fees" for details.
The Fund intends to treat any fees paid under the plan as
"service fees" for purposes of applicable rules of the
National Association of Securities Dealers, Inc. (the "NASD").
To the extent that such fees are deemed not to be "service
fees," Class D shareholders may, depending on the length of
time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples below are intended to help you compare the
cost of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $127 $397 $686 $1,511
--------------------------------------------------------------------
</TABLE>
Prospectus
20
<PAGE>
PIMCO Tax-Efficient Equity Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective A portion of Capitalization Range
and Seeks maximum the common More than $5 billion
Strategies after-tax stocks
growth of represented in
capital the S&P 500
Index
Fund Category Approximate Number Dividend Frequency
Enhanced Index of Holdings At least annually
More than 200
The Fund attempts to provide a total return which exceeds the
return of the S&P 500 Index by investing in a broadly diversified
portfolio of at least 200 common stocks. The Fund also attempts to
achieve superior after-tax returns for its shareholders by using a
variety of tax-efficient management strategies.
The Fund seeks to achieve its investment objective by normally
investing at least 95% of its assets in stocks represented in the
S&P 500 Index. The Fund's portfolio is designed to have certain
characteristics that are similar to those of the index, including
such measures as dividend yield, P/E ratio, relative volatility,
economic sector exposure, return on equity and market price-to-
book value ratio. The Fund's return is intended to correlate
highly with the return of the S&P 500 Index, but the portfolio
managers attempt to produce a higher total return than the index
by selecting a portion of the stocks represented in the index
using the quantitative techniques described below. The portfolio
managers also use these techniques to make sell decisions.
Notwithstanding these strategies, there is no assurance that the
Fund's investment performance will equal or exceed that of the S&P
500 Index.
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
Quantitative Techniques. The portfolio managers use a proprietary
quantitative model that ranks companies based on long-term (5-10
years) price appreciation potential. They analyze factors such as
growth of sustainable earnings and dividend behavior. Stocks in
the top 50% of the model's ranking are considered for purchase by
the Fund. The Fund looks to sell stocks selected from the bottom
20% of the model's ranking based on cost, current market value and
anticipated benefit of replacement. The portfolio managers' sell
discipline also focuses on reducing realized capital gains as
indicated below.
Tax-Efficient Strategies. The portfolio managers utilize a range
of active tax management strategies designed to minimize the
Fund's taxable distributions, including low portfolio turnover and
favoring investments in low-dividend, growth-oriented companies.
The portfolio managers also identify specific shares of stock to
be sold that have the lowest tax cost. When prudent, stocks are
also sold to realize capital losses in order to offset realized
capital gains. In limited circumstances, the Fund may also
distribute appreciated securities to shareholders to meet
redemption requests so as to avoid realizing capital gains.
Despite the use of these tax-efficient strategies, the Fund may
realize gains and shareholders will incur tax liability from time
to time.
- --------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities Risk . Credit Risk
. Issuer Risk . Leveraging Risk . Management 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. Past performance is no guarantee of future
results.
21 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Tax-Efficient Equity Fund (continued)
Calendar Year Total Returns -- Class D
[GRAPH]
Annual Return
99
17.19%
Calendar Year End (through 12/31)
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%)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (7/10/98)(/3/)
------------------------------------------------------------------------
Class D 17.19% 15.30%
------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 20.42%
------------------------------------------------------------------------
Lipper Growth Fund Average(/2/) 29.23% 23.65%
------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with long-term earnings
expected to grow significantly faster than the earnings of the
stocks represented in the major unmanaged stock indexes. It
does not take into account sales charges.
(3) The Fund began operations on 7/10/98. Index comparisons begin
on 6/30/98.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Administrative Fees" for details.
The Fund intends to treat any fees paid under the plan as
"service fees" for purposes of applicable rules of the
National Association of Securities Dealers, Inc. (the "NASD").
To the extent that such fees are deemed not to be "service
fees," Class D shareholders may, depending on the length of
time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $112 $350 $606 $1,340
--------------------------------------------------------------------
</TABLE>
Prospectus 22
<PAGE>
PIMCO Value Fund
- --------------------------------------------------------------------------------
Principal Investment Fund Focus Approximate
Investments Objective Undervalued Capitalization Range
and Seeks long-term larger More than $10 billion
Strategies growth of capitalization
capital and stocks with
income improving
business
fundamentals
Fund Category Approximate Number Dividend Frequency
Value Stocks 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 $10 billion at the time
of investment and below-average valuations whose business
fundamentals are expected to improve. To achieve income, the Fund
invests a portion of its assets in income-producing (e.g.,
dividend-paying) common stocks.
The portfolio manager selects stocks for the Fund using a "value"
style. The portfolio manager invests primarily in stocks of
companies having below-average valuations whose business
fundamentals are expected to improve. The portfolio manager
determines valuation based on characteristics such as price-to-
earnings, price-to-book, and price-to-cash flow ratios. The
portfolio manager analyzes stocks and seeks to identify the key
drivers of financial results and catalysts for change, such as new
management and new or improved products, that indicate a company
may demonstrate improving fundamentals in the future. The
portfolio manager looks to sell a stock when he believes that the
company's business fundamentals are weakening or when the stock's
valuation has become excessive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADR's). In response
to unfavorable market and other conditions, the Fund may make
temporary investments of some or all of its assets in high-quality
fixed income securities. This would be inconsistent with the
Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Risks
Among the principal risks of investing in the Fund, which could
adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment . Credit Risk
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
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. The Fund is
expected to change sub-advisers on or about May 8, 2000. The Fund
would not necessarily have achieved the performance results shown
on the next page under its expected new investment management
arrangements. Past performance is no guarantee of future results.
23 PIMCO Funds: Multi-Manager Series
<PAGE>
PIMCO Value Fund (continued)
Calendar Year Total Returns -- Class D
[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)
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%
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/30/91)(/3/)
-----------------------------------------------------------------------
Class D 3.88% 18.93% 14.67%
-----------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.70%
-----------------------------------------------------------------------
Lipper Growth and Income Fund Average(/2/) 13.71% 21.37% 15.51%
-----------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth and Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that combine a growth-of-earnings orientation
and an income requirement for level and/or rising dividends.
It does not take into account sales charges.
(3) The Fund began operations on 12/30/91. Fund comparisons begin
on 12/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Class D shares of the Fund:
of the
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<CAPTION>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Fees (12b-1) Fees(/1/) Expenses(/2/) Expenses
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D 0.45% 0.25% 0.40% 1.10%
--------------------------------------------------------------------
(1) The Fund's administration agreement includes a plan for Class
D shares that has been adopted in conformity with the
requirements set forth in Rule 12b-1 under the Investment
Company Act of 1940. Up to 0.25% per year of the total
Administrative Fee paid under the administration agreement may
be Distribution and/or Service (12b-1) Fees. The Fund will pay
a total of 0.65% per year under the administration agreement
regardless of whether a portion or none of the 0.25%
authorized under the plan is paid under the plan. Please see
"Management of the Funds--Administrative Fees" for details.
The Fund intends to treat any fees paid under the plan as
"service fees" for purposes of applicable rules of the
National Association of Securities Dealers, Inc. (the "NASD").
To the extent that such fees are deemed not to be "service
fees," Class D shareholders may, depending on the length of
time the shares are held, pay more than the economic
equivalent of the maximum front-end sales charges permitted by
relevant rules of the NASD.
(2) Other Expenses reflects the portion of the Administrative Fee
paid by the class that is not reflected under Distribution
and/or Service (12b-1) Fees.
Examples. The Examples are intended to help you compare the cost
of investing in Class D shares of the Fund with the costs of
investing in other mutual funds. The Examples assume that you
invest $10,000 in Class D shares for the time periods indicated,
and then redeem all your shares at the end of those periods. The
Examples also assume that your investment has a 5% return each
year, the reinvestment of all dividends and distributions, and the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<CAPTION>
Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class D $112 $350 $606 $1,340
--------------------------------------------------------------------
</TABLE>
Prospectus 24
<PAGE>
Summary of Principal Risks
The value of your investment in a Fund changes with the values of
that Fund's investments. Many factors can affect those values. The
factors that are most likely to have a material effect on a
particular Fund's portfolio as a whole are called "principal
risks." The principal risks of each Fund are identified in the
Fund Summaries and are summarized in this section. Each Fund may
be subject to additional principal risks and risks other than
those described below because the types of investments made by
each Fund can change over time. Securities and investment
techniques mentioned in this summary and described in greater
detail under "Characteristics and Risks of Securities and
Investment Techniques" appear in bold type. That section and
"Investment Objectives and Policies" in the Statement of
Additional Information also include more information about the
Funds, their investments and the related risks. There is no
guarantee that a Fund will be able to achieve its investment
objective.
Market The market price of securities owned by a Fund may go up or down,
Risk sometimes rapidly or unpredictably. Each of the Funds normally
invests most of its assets in common stocks and/or other equity
securities. A principal risk of investing in each Fund is that the
equity securities in its portfolio will decline in value due to
factors affecting equity securities markets generally or
particular industries represented in those markets. The values of
equity securities may decline due to general market conditions
which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the
general outlook for corporate earnings, changes in interest or
currency rates or adverse investor sentiment generally. They may
also decline due to factors which affect a particular industry or
industries, such as labor shortages or increased production costs
and competitive conditions within an industry. Equity securities
generally have greater price volatility than fixed income
securities.
Issuer The value of a security may decline for a number of reasons which
Risk directly relate to the issuer, such as management performance,
financial leverage and reduced demand for the issuer's goods or
services.
Value Each Fund may invest in companies that may not be expected to
Securities experience significant earnings growth, but whose securities its
Risk portfolio manager believes are selling at a price lower than their
true value. The Capital Appreciation, Equity Income, Mid-Cap,
Renaissance and Value Funds place particular emphasis on value
securities. Companies that issue value securities may have
experienced adverse business developments or may be subject to
special risks that have caused their securities to be out of
favor. If a portfolio manager's assessment of a company's
prospects is wrong, or if the market does not recognize the value
of the company, the price of its securities may decline or may not
approach the value that the portfolio manager anticipates.
Growth Each Fund may invest in equity securities of companies that its
Securities portfolio manager believes will experience relatively rapid
Risk earnings growth. The Capital Appreciation, Global Innovation,
Growth, Mid-Cap, Innovation and Select Growth Funds place
particular emphasis on growth securities. Growth securities
typically trade at higher multiples of current earnings than other
securities. Therefore, the values of growth securities may be more
sensitive to changes in current or expected earnings than the
values of other securities.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk smaller market capitalizations. These companies may have limited
product lines, markets or financial resources or they may depend
on a few key employees. Securities of smaller companies may trade
less frequently and in lesser volume than more widely held
securities and their values may fluctuate more sharply than other
securities. They may also trade in the over-the-counter market or
on a regional exchange, or may otherwise have limited liquidity.
The Global Innovation and Innovation Funds generally have
substantial exposure to this risk. The Mid-Cap Fund has
significant exposure to this risk because it invests primarily in
companies with medium-sized market capitalizations, which are
smaller and generally less-seasoned than the largest companies.
Liquidity All of the Funds are subject to liquidity risk. Liquidity risk
Risk exists when particular investments are difficult to purchase or
sell, possibly preventing a Fund from selling such illiquid
securities at an advantageous time or price. Funds with principal
investment strategies that involve securities of companies with
smaller market capitalizations, foreign securities, derivatives or
securities with substantial market and/or credit risk tend to have
the greatest exposure to liquidity risk.
Derivatives
Risk
The Global Innovation, Growth, Innovation, Renaissance, Select
Growth and Tax-Efficient Equity Funds may use derivatives, which
are financial contracts whose value depends on, or is derived
from, the value of an underlying asset, reference rate or index.
The various derivative instruments that the Funds may use are
referenced under "Characteristics and Risks of Securities and
Investment Techniques--Derivatives" in this Prospectus and
described in more detail under "Investment
25 PIMCO Funds: Multi-Manager Series
<PAGE>
Objectives and Policies" in the Statement of Additional
Information. The Funds may sometimes use derivatives as part of a
strategy designed to reduce exposure to other risks, such as
interest rate or currency risk. The Funds may also use derivatives
for leverage, which increases opportunities for gain but also
involves greater risk of loss due to leveraging risk. A Fund's use
of derivative instruments involves risks different from, or
possibly greater than, the risks associated with investing
directly in securities and other traditional investments.
Derivatives are subject to a number of risks described elsewhere
in this section, such as liquidity risk, market risk, credit risk
and management risk. They also involve the risk of mispricing or
improper valuation and the risk that changes in the value of the
derivative may not correlate perfectly with the underlying asset,
rate or index. In addition, a Fund's use of derivatives may
increase or accelerate the amount of taxes payable by
shareholders. A Fund investing in a derivative instrument could
lose more than the principal amount invested. Also, suitable
derivative transactions may not be available in all circumstances
and there can be no assurance that a Fund will engage in these
transactions to reduce exposure to other risks when that would be
beneficial.
Foreign A Fund that invests in foreign securities, and particularly the
(non- Global Innovation Fund, may experience more rapid and extreme
U.S.) changes in value than Funds that invest exclusively in securities
Investment of U.S. issuers or securities that trade exclusively in U.S.
Risk markets. The securities markets of many foreign countries are
relatively small, with a limited number of companies representing
a small number of industries. Additionally, issuers of foreign
securities are usually not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting and auditing
standards of foreign countries differ, in some cases
significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely
affect a Fund's investments in a foreign country. In the event of
nationalization, expropriation or other confiscation, a Fund could
lose its entire investment in foreign securities. To the extent
that a Fund, such as the Global Innovation Fund, invests a
significant portion of its assets in a narrowly defined area such
as Europe, Asia or South America, the Fund will generally have
more exposure to regional economic risks associated with foreign
investments. Adverse developments in certain regions (such as
Southeast Asia) can also adversely affect securities of other
countries whose economies appear to be unrelated. In addition,
special U.S. tax considerations may apply to a Fund's investment
in foreign securities.
Emerging Foreign investment risk may be particularly high to the extent
Markets that a Fund invests in emerging market securities of issuers based
Risk in countries with developing economies. These securities may
present market, credit, currency, liquidity, legal, political and
other risks different from, or greater than, the risks of
investing in developed foreign countries. The Global Innovation
Fund may invest a significant portion of its assets in emerging
markets securities.
Currency Funds that invest directly in foreign currencies and in securities
Risk that trade in, or receive revenues in, foreign currencies are
subject to the risk that those currencies will decline in value
relative to the U.S. Dollar, or, in the case of hedging positions,
that the U.S. Dollar will decline in value relative to the
currency being hedged. The Global Innovation Fund is particularly
sensitive to Currency Risk. Currency rates in foreign countries
may fluctuate significantly over short periods of time for a
number of reasons, including changes in interest rates,
intervention (or the failure to intervene) by U.S. or foreign
governments, central banks or supranational entities such as the
International Monetary Fund, or by the imposition of currency
controls or other political developments in the U.S. or abroad.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies increases risk. Funds, such as the Select
Risk Growth Fund, that are "non-diversified" because they invest in a
relatively small number of issuers may have more risk because
changes in the value of a single security or the impact of a
single economic, political or regulatory occurrence may have a
greater adverse impact on the Fund's net asset value. Some of
those issuers also may present substantial credit or other risks.
The Global Innovation Fund may be subject to increased risk to the
extent that it focuses its investments in securities denominated
in a particular foreign currency or in a narrowly defined
geographic area outside the U.S. Similarly, the Global Innovation
and Innovation Funds are vulnerable to events affecting companies
which use innovative technologies to gain a strategic, competitive
advantage in their industry and companies that provide and service
those technologies because these Funds normally "concentrate"
their investments in those companies. Also, the Funds may from
time to time have greater risk because they invest a substantial
portion of their assets in related industries such as "technology"
or "financial and business services."
Leveraging
Risk
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.
Prospectus 26
<PAGE>
Leverage, including borrowing, will cause the value of a Fund's
shares to be more volatile than if the Fund did not use leverage.
This is because leverage tends to exaggerate the effect of any
increase or decrease in the value of a Fund's portfolio
securities. The use of leverage may also cause a Fund to liquidate
portfolio positions when it would not be advantageous to do so in
order to satisfy its obligations or to meet segregation
requirements.
Interest To the extent that Funds purchase fixed income securities for
Rate Risk investment or defensive purposes, they will be subject to interest
rate risk, a market risk relating to investments in fixed income
securities such as bonds and notes. As interest rates rise, the
value of fixed income securities in a Fund's portfolio are likely
to decrease.
Credit All of the Funds are subject to credit risk. This is the risk that
Risk the issuer or the guarantor of a fixed income security, or the
counterparty to a derivatives contract, repurchase agreement or a
loan of portfolio securities, is unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor
its obligations. Securities are subject to varying degrees of
credit risk, which are often reflected in their credit ratings.
Management Each Fund is subject to management risk because it is an actively
Risk managed investment portfolio. PIMCO Advisors, the Sub-Advisers and
each individual portfolio manager will apply investment techniques
and risk analyses in making investment decisions for the Funds,
but there can be no guarantee that these will produce the desired
results.
Management of the Funds
Investment
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 December 31, 1999, PIMCO Advisors and its subsidiary
partnerships had more than $261 billion in assets under
management.
PIMCO Advisors has retained investment management firms ("Sub-
Advisers") to manage the investments of the Capital Appreciation,
Mid-Cap and Tax-Efficient Equity Funds. The PIMCO Equity Advisors
division of PIMCO Advisors manages the investments of the Equity
Income, Global Innovation, Growth, Innovation, Renaissance, Select
Growth and Value Funds (PIMCO Equity Advisors is also referred to
as a "Sub-Adviser" in this capacity). See "Sub-Advisers" below.
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Funds in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may retain
other affiliates to provide certain of these services.
Advisory Each Fund pays PIMCO Advisors fees in return for providing or
Fees arranging for the provision of investment advisory services. In
the case of Funds for which PIMCO Advisors has retained a separate
Sub-Adviser, PIMCO Advisors (and not the Fund) pays a portion of
the advisory fees it receives to the Sub-Adviser in return for its
services.
For the fiscal year ended June 30, 1999, the Funds paid monthly
advisory fees to PIMCO Advisors at the following annual rates
(stated as a percentage of the average daily net assets of each
Fund taken separately):
<TABLE>
<CAPTION>
Fund Advisory Fees
------------------------------------------------------------------
<S> <C>
Capital Appreciation, Equity Income, Mid-Cap and Value
Funds 0.45%
Growth Fund 0.50%
Select Growth Fund 0.57%*
Renaissance Fund 0.60%
Innovation Fund 0.65%
</TABLE>
* On April 1, 2000, the advisory fee rate for the Select Growth
Fund increased to 0.60% per annum.
The Global Innovation and Tax-Efficient Equity Funds were not
operational during the entire fiscal year ended June 30, 1999. The
annual investment advisory fee rate payable by these Funds are as
follows (stated as a percentage of the average daily net assets
each Fund taken separately): Global Innovation--1.00%; Tax
Efficient Equity--0.45%.
27 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. Class D shareholders of
each Fund pay an administrative fee to PIMCO Advisors, computed as
a percentage of the Fund's assets attributable in the aggregate to
Class D shares. PIMCO Advisors, in turn, provides or procures
administrative services for Class D shareholders and also bears
the costs of various third-party services required by the Funds,
including audit, custodial, portfolio accounting, legal, transfer
agency and printing costs. The result of this fee structure is an
expense level for Class D shareholders of each Fund that, with
limited exceptions, is precise and predictable under ordinary
circumstances.
PIMCO Advisors or an affiliate may pay financial service firms a
portion of the Class D administrative fees in return for the
firms' services (normally not to exceed an annual rate of 0.35% of
a Fund's average daily net assets attributable to Class D shares
purchased through such firms).
For the fiscal year ended June 30, 1999, Class D shareholders of
the Funds paid PIMCO Advisors monthly administrative fees at the
following annual rates (stated as a percentage of the average
daily net assets attributable in the aggregate to the Fund's Class
D shares):
<TABLE>
<CAPTION>
Fund Administrative Fees*
-------------------------------------------------------------------
<S> <C>
Capital Appreciation, Equity Income, Innovation,
Mid-Cap, Renaissance and Value Funds 0.65%
</TABLE>
*As described below under "12b-1 Plan for Class D Shares," the
administration agreement includes a plan adopted in conformity
with Rule 12b-1 under the Investment Company Act of 1940 (the
"1940 Act") which provides for the payment of up to 0.25% of the
0.65% (0.85% for the Global Innovation Fund) Administrative Fee
as reimbursement for expenses in respect of activities that may
be deemed to be primarily intended to result in the sale of
Class D shares. In the Fund Summaries above, the "Annual Fund
Operating Expenses" table provided under "Fees and Expenses of
the Fund" for each Fund shows the 0.65% (0.85% for the Global
Innovation Fund) Administrative Fee rate under two separate
columns entitled "Distribution and/or Service (12b-1) Fees"
(0.25%) and "Other Expenses" (0.40%) (0.60% for the Global
Innovation Fund).
The Global Innovation, Growth, Select Growth and Tax-Efficient
Equity Funds did not offer Class D shares during the entire fiscal
year ended June 30, 1999. Class D shareholders of each of these
Funds pay administrative fees at the following annual rates
(stated as a percentage of the average daily net assets
attributable in the aggregate to the Fund's Class D shares):
Global Innovation--0.85%; Growth and Select Growth--0.65%.
12b-1 The Funds' administration agreement includes a plan for Class D
Plan for shares that has been adopted in conformity with the requirements
Class D set forth in Rule 12b-1 under the 1940 Act. The plan provides that
Shares up to 0.25% per annum of the Class D administrative fees paid
under the administration agreement may represent reimbursement for
expenses in respect of activities that may be deemed to be
primarily intended to result in the sale of Class D shares. The
principal types of activities for which such payments may be made
are services in connection with the distribution of Class D shares
and/or the provision of shareholder services. Because 12b-1 fees
would be paid out of a Fund's Class D share assets on an ongoing
basis, over time these fees would increase the cost of your
investment in Class D shares and may cost you more than other
types of sales charges.
Sub- Each Sub-Adviser has full investment discretion and makes all
Advisers determinations with respect to the investment of a Fund's assets.
The following provides summary information about each Sub-Adviser,
including the Fund(s) it manages.
<TABLE>
<CAPTION>
Sub-Adviser* Funds
-------------------------------------------------------------------------------------------------------------
<S> <C>
PIMCO Equity Advisors division of PIMCO Equity Income, Global Innovation, Growth, Innovation, Renaissance, Select Growth and Value
Advisors ("PIMCO Equity Advisors")
1345 Avenue of the Americas, 50th
Floor
New York, NY 10105
-------------------------------------------------------------------------------------------------------------
Cadence Capital Management Capital Appreciation and
("Cadence") Mid-Cap
Exchange Place, 53 State Street
Boston, MA 02109
-------------------------------------------------------------------------------------------------------------
Parametric Portfolio Associates Tax-Efficient Equity
("Parametric")
7310 Columbia Center, 701 Fifth
Avenue
Seattle, WA 98104
</TABLE>
*PIMCO Equity Advisors is a division of PIMCO Advisors. Each of
the other Sub-Advisers is an affiliated sub-partnership of PIMCO
Advisors.
The following provides additional information about each Sub-
Adviser and the individual portfolio managers who have or share
primary responsibility for managing the Funds' investments.
PIMCO
Equity
Advisors
A division of PIMCO Advisors, PIMCO Equity Advisors provides
equity-related advisory services to mutual funds and institutional
accounts. See "Investment Adviser and Administrator" above for
additional information about PIMCO Advisors.
Prospectus 28
<PAGE>
The following individuals at PIMCO Equity Advisors have primary
responsibility for the noted Funds. A different sub-advisory firm
served as Sub-Adviser for the Growth and Innovation Funds prior to
March 6, 1999, for the Renaissance Fund prior to May 7, 1999 and
for the Select Growth Fund prior to July 1, 1999. In addition, on
or about May 8, 2000, it is expected that PIMCO Equity Advisors
will assume the position of Sub-Adviser to the Equity Income and
Value Funds from NFJ Investment Group, the Funds' current Sub-
Adviser.
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
--------------------------------------------------------------------------------
<C> <C> <C> <S>
Equity Income Kenneth W. Corba 2000* Managing Director and
Chief Investment Officer
of PIMCO Equity Advisors
and a Member of the
Management Board of
PIMCO Advisors. Prior to
joining PIMCO Advisors,
he was with Eagle Asset
Management from 1995 to
1998, serving in various
capacities including as
Chief Investment Officer
and Portfolio Manager.
He was with Stein Roe
and Farnham Inc. from
1984 to 1995, serving in
various capacities
including as Director of
the Capital Management
Group, Senior Vice
President and Portfolio
Manager.
Global Innovation Dennis P. McKechnie 1999 Portfolio Manager of
(Inception)+ PIMCO Equity Advisors.
Prior to joining PIMCO
Advisors, he was with
Columbus Circle
Investors from 1991 to
1999, where he managed
equity accounts and
served in various
capacities including as
Portfolio Manager for
the Innovation Fund.
Growth Mr. Corba 1999 See above.
Innovation Mr. McKechnie 1998 See above.
Renaissance John K. Schneider 1999 Senior Portfolio Manager
of PIMCO Equity
Advisors. Prior to
joining PIMCO Advisors,
he was a partner and
Portfolio Manager of
Schneider Capital
Management from 1996 to
1999, where he managed
equity accounts for
various institutional
clients. Prior to that
he was a member of the
Equity Policy Committee
and Director of Research
at Newbold's Asset
Management from 1991 to
1996.
Select Growth Messrs. Corba and Schneider 1999 See above.
Value Mr. Schneider 2000* See above.
-------
* Expected.
+ Prior to PIMCO Advisors and PIMCO Equity Advisors assuming their
positions as Adviser and Sub-Adviser, respectively, of the
Global Innovation Fund, Mr. McKechnie managed the Fund's
portfolio in his capacity as an officer of the Trust.
Cadence An affiliated sub-partnership of PIMCO Advisors, Cadence provides
advisory services to mutual funds and institutional accounts.
Cadence Capital Management Corporation, the predecessor investment
adviser to Cadence, commenced operations in 1988. Accounts managed
by Cadence had combined assets as of December 31, 1999 of
approximately $6.4 billion.
The following individuals at Cadence share primary responsibility
for each of the noted Funds.
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
--------------------------------------------------------------------------------
<C> <C> <C> <S>
Capital David B. Breed 1991 Managing Director, Chief
Appreciation (Inception) Executive Officer, Chief
Investment Officer and
founding partner of
Cadence. Member of the
Management Board of
PIMCO Advisors. He is a
research generalist and
has lead the team of
portfolio managers and
analysts since 1988. Mr.
Breed has managed
separate equity accounts
for many institutional
clients and has lead the
team that manages the
PIMCO Funds sub-advised
by Cadence since those
Funds' inception dates.
William B. Bannick 1992 Managing Director and
Executive Vice President
at Cadence. Mr. Bannick
is a research generalist
and Senior Portfolio
Manager for the Cadence
team. He has managed
separately managed
equity accounts for
various Cadence
institutional clients
and has been a member of
the team that manages
the PIMCO Funds sub-
advised by Cadence since
joining Cadence in 1992.
Katherine A. Burdon 1993 Managing Director and
Senior Portfolio Manager
at Cadence. Ms. Burdon
is a research generalist
and has managed
separately managed
equity accounts for
various Cadence
institutional clients
and has been a member of
the team that manages
the PIMCO Funds sub-
advised by Cadence since
joining Cadence in 1993.
</TABLE>
29 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
--------------------------------------------------------------------------
<C> <C> <C> <S>
Capital Peter B. McManus 1994 Director, Account
Appreciation (cont.) Management at Cadence.
He has been a member of
the investment team at
Cadence and handles
client relationships of
separately managed
accounts, and has been a
member of the team that
manages the PIMCO Funds
sub-advised by Cadence
since joining Cadence in
1994. Previously, he
served as a Vice
President of Bank of
Boston from 1991
to 1994.
Mid-Cap Messrs. Breed, Same as See above.
Bannick and Capital
McManus and Appreciation
Ms. Burdon Fund
</TABLE>
Parametric An affiliated sub-partnership of PIMCO Advisors, Parametric
provides advisory services to mutual funds and institutional
accounts. Parametric Portfolio Associates, Inc., the predecessor
investment adviser to Parametric, commenced operations in 1987.
Accounts managed by Parametric had combined assets as of December
31, 1999 of approximately $4.1 billion.
The following individuals at Parametric share primary
responsibility for the Tax-Efficient Equity Fund.
<TABLE>
<CAPTION>
Recent Professional
Fund Portfolio Managers Since Experience
------------------------------------------------------------------------------
<C> <C> <C> <S>
Tax-Efficient Equity David Stein 1998 (Inception) Managing Director of
Parametric. He also
serves as a Senior
Porfolio Manager of
PIMCO Equity Advisors.
He has been with
Parametric since 1996
where he leads the
investment, research and
product development
activities. Previously,
he served in Investment
Research at GTE
Corporation from 1995 to
1996, in Equity Research
at Vanguard Group from
1994 to 1995 and in
Investment Research at
IBM Corporation from
1977 to 1994.
Tom Seto 1998 (Inception) Vice President and
Portfolio Manager of
Parametric. Since
joining Parametric in
1998, he has been
responsible for
management of
Parametric's active U.S.
equity strategies and
has managed structured
equity portfolios.
Previously, he was with
Barclays global
Investors from 1991 to
1998, serving in various
capacities including as
head of U.S. Equity
Index Investments and
Portfolio Manager.
</TABLE>
Distributor The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stamford, CT 06902, is a broker-dealer
registered with the Securities and Exchange Commission.
How Fund Shares Are Priced
The net asset value ("NAV") of a Fund's Class D shares is
determined by dividing the total value of a Fund's portfolio
investments and other assets attributable to that class, less any
liabilities, by the total number of shares outstanding of that
class.
For purposes of calculating NAV, portfolio securities and other
assets for which market quotes are available are stated at market
value. Market value is generally determined on the basis of last
reported sales prices, or if no sales are reported, based on
quotes obtained from a quotation reporting system, established
market makers, or pricing services. Certain securities or
investments for which daily market quotes are not readily
available may be valued, pursuant to guidelines established by the
Board of Trustees, with reference to other securities or indices.
Short-term investments having a maturity of 60 days or less are
generally valued at amortized cost. Exchange traded options,
futures and options on futures are valued at the settlement price
determined by the exchange. Other securities for which market
quotes are not readily available are valued at fair value as
determined in good faith by the Board of Trustees or persons
acting at their direction.
Investments initially valued in currencies other than the U.S.
dollar are converted to U.S. dollars using exchange rates obtained
from pricing services. As a result, the NAV of a Fund's shares may
be affected by changes in the value of currencies in relation to
the U.S. dollar. The value of securities traded in markets outside
the United States or denominated in currencies other than the U.S.
dollar may be affected significantly on a day that the New York
Stock Exchange is closed and an investor is not able to purchase,
redeem or exchange shares.
Fund shares are valued at the close of regular trading (normally
4:00 p.m., Eastern time) (the "NYSE Close") on each day that the
New York Stock Exchange is open. For purposes of calculating the
NAV,
Prospectus 30
<PAGE>
the Funds normally use pricing data for domestic equity securities
received shortly after the NYSE Close and do not normally take
into account trading, clearances or settlements that take place
after the NYSE Close. Domestic fixed income and foreign securities
are normally priced using data reflecting the earlier closing of
the principal markets for those securities. Information that
becomes known to the Funds or their agents after the NAV has been
calculated on a particular day will not generally be used to
retroactively adjust the price of a security or the NAV determined
earlier that day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Funds may value securities at fair value or
estimate their value as determined in good faith by the Board of
Trustees pursuant to procedures approved by the Board of Trustees.
Fair valuation may also be used by the Board of Trustees if
extraordinary events occur after the close of the relevant market
but prior to the NYSE Close.
How to Buy and Sell Shares
The following section provides basic information about how to buy,
sell (redeem) and exchange Class D shares of the Funds.
General . Financial Service Firms. Broker-dealers, registered investment
Information advisers and other financial service firms provide varying
investment products, programs or accounts, pursuant to
arrangements with the Distributor, through which their clients may
purchase and redeem Class D shares of the Funds. Firms will
generally provide or arrange for the provision of some or all of
the shareholder servicing and account maintenance services
required by your account, including, without limitation, transfers
of registration and dividend payee changes. Firms may also perform
other functions, including generating confirmation statements and
disbursing cash dividends, and may arrange with their clients for
other investment or administrative services. Your firm may
independently establish and charge you transaction fees and/or
other additional amounts for such services, which may change over
time. These fees and additional amounts could reduce your
investment returns on Class D shares of the Funds.
Your financial service firm may have omnibus accounts and similar
arrangements with the Trust and may be paid for providing sub-
transfer agency and other services. A firm may be paid for its
services directly or indirectly by the Funds, PIMCO Advisors or an
affiliate (normally not to exceed an annual rate of 0.35% of a
Fund's average daily net assets attributable to its Class D shares
and purchased through such firm for its clients). Your firm may
establish various minimum investment requirements for Class D
shares of the Funds and may also establish certain privileges with
respect to purchases, redemptions and exchanges of Class D shares
or the reinvestment of dividends. Please contact your firm for
information.
This Prospectus should be read in connection with your firm's
materials regarding its fees and services.
. Calculation of Share Price and Redemption Payments. When you
buy or sell (redeem) Class D shares of the Funds, you pay or
receive a price equal to the NAV of the shares. NAVs are
determined at the close of regular trading (normally, 4:00 p.m.,
Eastern time) on each day the New York Stock Exchange is open. See
"How Fund Shares Are Priced" above for details. Generally,
purchase and redemption orders for Fund shares are processed at
the NAV next calculated after your order is received by the
Distributor. In addition, orders received by the Distributor from
financial service firms after NAV is determined that day will be
processed at that day's NAV if the orders were received by the
firm from its customer prior to such determination and were
transmitted to and received by the Distributor prior to its close
of business that day (normally 7:00 p.m., Eastern time).
The Trust does not calculate NAVs or process orders on days when
the New York Stock Exchange is closed. If your purchase or
redemption order is received by the Distributor on a day when the
New York Stock Exchange is closed, it will be processed on the
next succeeding day when the New York Stock Exchange is open
(according to the succeeding day's NAV).
Buying
Shares
Class D shares of each Fund are continuously offered through
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
31 PIMCO Funds: Multi-Manager Series
<PAGE>
Distributor, and may charge you for such services. If you wish to
purchase shares of the Funds directly from the Trust or the
Distributor, you should inquire about the other classes of shares
offered by the Trust. Please call the Distributor at 1-888-87-
PIMCO for information about other investment options.
Class D shares of the Funds will be held in your account with
your financial service firm and, generally, your firm will hold
your Class D shares in nominee or street name as your agent. In
most cases, the Trust's transfer agent, PFPC, Inc., will have no
information with respect to or control over accounts of specific
Class D shareholders and you may obtain information about your
accounts only through your financial service firm. In certain
circumstances, your firm may arrange to have your shares held in
your own name or you may subsequently become a holder of record
for some other reason (for instance, if you terminate your
relationship with your firm). In such circumstances, please
contact the Distributor at 1-888-87-PIMCO for information about
your account. In the interest of economy and convenience,
certificates for Class D shares will not be issued.
The Distributor, in its sole discretion, may accept or reject any
order for purchase of Fund shares. The sale of shares will be
suspended during any period in which the New York Stock Exchange
is closed for other than weekends or holidays, or if permitted by
the rules of the Securities and Exchange Commission, when trading
on the New York Stock Exchange is restricted or during an
emergency which makes it impracticable for the Funds to dispose of
their securities or to determine fairly the value of their net
assets, or during any other period as permitted by the Securities
and Exchange Commission for the protection of investors.
Investment The following investment minimums apply for purchases of Class D
Minimums shares.
<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.
Exchange
Limitations
Until July 3, 2000, shareholders will not be permitted to exchange
their shares of any Fund or series of PIMCO Funds: Pacific
Investment Management Series for shares of the Global Innovation
Fund, although investors will be permitted to exchange their
shares of the Global Innovation Fund for shares of the same class
of any other Fund or series of the Trust or of PIMCO Funds:
Pacific Investment Management Series. This restriction may be
changed or eliminated at any time at the discretion of the
Distributor.
Prospectus 32
<PAGE>
Selling You can sell (redeem) Class D shares through your financial
Shares service firm on any day the New York Stock Exchange is open. You
do not pay any fees or other charges to the Trust or the
Distributor when you sell your shares, although your financial
service firm may charge you for its services in processing your
redemption request. Please contact your firm for details. If you
are the holder of record of your Class D shares, you may contact
the Distributor at 1-888-87-PIMCO for information regarding how to
sell your shares directly to the Trust.
Your financial service firm is obligated to transmit your
redemption orders to the Distributor promptly and is responsible
for ensuring that your redemption request is in proper form. Your
financial service firm will be responsible for furnishing all
necessary documentation to the Distributor or the Trust's transfer
agent and may charge you for its services. Redemption proceeds
will be forwarded to your financial service firm as promptly as
possible and in any event within seven days after the redemption
request is received by the Distributor in good order.
Redemptions of Fund shares may be suspended when trading on the
Exchange is restricted or during an emergency which makes it
impracticable for the Funds to dispose of their securities or to
determine fairly the value of their net assets, or during any
other period as permitted by the Securities and Exchange
Commission for the protection of investors. Under these and other
unusual circumstances, the Trust may suspend redemptions or
postpone payment for more than seven days, as permitted by law.
Redemptions The Trust had agreed to redeem shares of each Fund solely in cash
In Kind up to the lesser of $250,000 or 1% of the Fund's net assets during
any 90-day period for any one shareholder. In consideration of the
best interests of the remaining shareholders, the Trust may pay
any redemption proceeds exceeding this amount in whole or in part
by a distribution in kind of securities held by a Fund in lieu of
cash. Except for Funds with a tax-efficient management strategy,
it is highly unlikely that your shares would ever be redeemed in
kind. If your shares are redeemed in kind, you should expect to
incur transaction costs upon the disposition of the securities
received in the distribution.
Fund Distributions
Each Fund distributes substantially all of its net investment
income to shareholders in the form of dividends. You begin earning
dividends on Fund shares the day after the Trust receives your
purchase payment. Dividends paid by each Fund with respect to its
Class D shares are calculated in the same manner and at the same
time. The following shows when each Fund intends to declare and
distribute income dividends to shareholders of record.
<TABLE>
<CAPTION>
Fund At Least Annually Quarterly
-------------------------------------------------------------
<S> <C> <C>
Equity Income, Renaissance and .
Value Funds
-------------------------------------------------------------
All other Funds .
-------------------------------------------------------------
</TABLE>
In addition, each Fund distributes any net capital gains it earns
from the sale of portfolio securities to shareholders no less
frequently than annually. Net short-term capital gains may be paid
more frequently.
You can choose from the following distribution options:
. Reinvest all distributions in additional Class D shares of your
Fund at NAV. This will be done unless you elect another option.
. Invest all distributions in Class D shares of any other Fund or
another series of the Trust or PIMCO Funds: Pacific Investment
Management Series which offers Class D shares at NAV. You must
have an account existing in the Fund or series selected for
investment with the identical registered name. This option must be
elected when your account is set up.
. Receive all distributions in cash (either paid directly to you
or credited to your account with your financial service firm).
This option must be elected when your account is set up.
Your financial service firm may offer additional distribution
reinvestment programs or options. Please contact your firm for
details.
33 PIMCO Funds: Multi-Manager Series
<PAGE>
You do not pay any sales charges on shares you receive through
the reinvestment of Fund distributions. If you elect to receive
Fund distributions in cash and the postal or other delivery
service is unable to deliver checks to your address of record, the
Trust's Transfer Agent will hold the returned checks for your
benefit in a non-interest bearing account.
For further information on distribution options, please contact
your financial service firm or call the Distributor at 1-888-87-
PIMCO.
Tax Consequences
. Taxes on Fund distributions. If you are subject to U.S.
federal income tax, you will be subject to tax on Fund
distributions whether you received them in cash or reinvested them
in additional shares of the Funds. For federal income tax
purposes, Fund distributions will be taxable to you as either
ordinary income or capital gains.
Fund dividends (i.e., distributions of investment income) are
taxable to you as ordinary income. Federal taxes on Fund
distributions of gains are determined by how long the Fund owned
the investments that generated the gains, rather than how long you
have owned your shares. Distributions of gains from investments
that a Fund owned for more than 12 months will generally be
taxable to you as capital gains. Distributions of gains from
investments that the Fund owned for 12 months or less will
generally be taxable to you as ordinary income.
Fund distributions are taxable to you even if they are paid from
income or gains earned by a Fund prior to your investment and thus
were included in the price you paid for your shares. For example,
if you purchase shares on or just before the record date of a Fund
distribution, you will pay full price for the shares and may
receive a portion of your investment back as a taxable
distribution.
. Taxes when you sell (redeem) or exchange your shares. Any gain
resulting from the sale of Fund shares will generally be subject
to federal income tax. When you exchange shares of a Fund for
shares of another series, the transaction will generally be
treated as a sale of the Fund shares for these purposes, and any
gain on those shares will generally be subject to federal income
tax.
. A Note on the Tax-Efficient Equity Fund. The Tax-Efficient
Equity Fund utilizes a number of tax-efficient management
techniques designed to minimize taxable distributions. For
instance, the Fund generally seeks to minimize realized gains and,
when realizing gains, attempts to realize gains that will be taxed
as capital gains (i.e., as gains on investments owned for more
than 12 months) when distributed to shareholders. Although the
Fund attempts to minimize taxable distributions, it may be
expected to earn and distribute taxable income and realize and
distribute capital gains from time to time.
. A Note on Foreign Investments. A Fund's investment in foreign
securities may be subject to foreign withholding taxes. In that
case, the Fund's yield on those securities would be decreased. In
addition, a Fund's investments in foreign securities or foreign
currencies may increase or accelerate the Fund's recognition of
ordinary income and may affect the timing or amount of the Fund's
distributions.
This section relates only to federal income tax consequences of
investing in the Funds; the consequences under other tax laws may
differ. You should consult your tax advisor as to the possible
application of foreign, state and local income tax laws to Fund
dividends and capital distributions. Please see the Statement of
Additional Information for additional information regarding the
tax aspects of investing in the Funds.
Characteristics and Risks of Securities
and Investment Techniques
This section provides additional information about some of the
principal investments and related risks of the Funds identified
under "Summary Information" above. It also describes
characteristics and risks of additional securities and investment
techniques that are not necessarily principal investment
strategies but may be used by the Funds from time to time. Most of
these securities and investment techniques are discretionary,
which means that the portfolio managers can decide whether to use
them or not. This Prospectus does not attempt to disclose all of
the various types of securities and investment techniques that may
be used by the Funds. As with any mutual fund, investors in the
Funds must rely on the professional investment judgment and skill
of PIMCO Advisors, the Sub-Advisers and the individual portfolio
managers. Please see "Investment Objectives and Policies" in the
Statement of
Prospectus 34
<PAGE>
Additional Information for more detailed information about the
securities and investment techniques described in this section and
about other strategies and techniques that may be used by the
Funds.
Fixed Fixed income securities are obligations of the issuer to make
Income payments of principal and/or interest on future dates, and include
Securities corporate and government bonds, notes, certificates of deposit,
and commercial paper, convertible securities and mortgage-backed and
Defensive other asset-backed securities.
Strategies
The Capital Appreciation, Mid-Cap and Tax-Efficient Equity Funds
intend to be as fully invested in common stocks as practicable at
all times, although, for cash management purposes, each of these
Funds may maintain a portion of its assets (normally not more than
10%) in U.S. Government securities, high quality fixed income
securities, money market obligations and cash to pay certain Fund
expenses and to meet redemption requests. None of these Funds will
make defensive investments in response to unfavorable market and
other conditions and therefore may be particularly vulnerable to
general declines in stock prices and/or other categories of
securities in which they invest.
The Equity Income, Global Innovation, Growth, Innovation,
Renaissance, Select Growth and Value Funds will each invest
primarily in common stocks, and may also invest in other kinds of
equity securities, including preferred stocks and securities
(including fixed income securities and warrants) convertible into
or exercisable for common stocks. Each of these Funds may also
invest a portion of its assets in fixed income securities. These
Funds may temporarily hold up to 100% of their assets in short-
term U.S. Government securities and other money market instruments
for defensive purposes in response to unfavorable market and other
conditions. The temporary defensive strategies described in this
paragraph would be inconsistent with the investment objective and
principal investment strategies of each of the noted Funds and may
adversely affect the Fund's ability to achieve its investment
objective.
Companies
With
Smaller
Market
Capitalizations
Each of the Funds may invest in securities of companies with
market capitalizations that are small compared to other publicly
traded companies. The Global Innovation and Innovation Funds may
invest significant portions of their assets in smaller companies
and therefore have substantial exposure to the risks described
below. The Mid-Cap Fund also has significant exposure to the risks
described below because it invests primarily in companies with
medium-sized market capitalizations, which are smaller than the
largest companies.
Companies which are smaller and less well-known or seasoned than
larger, more widely held companies may offer greater opportunities
for capital appreciation, but may also involve risks different
from, or greater than, risks normally associated with larger
companies. Larger companies generally have greater financial
resources, more extensive research and development, manufacturing,
marketing and service capabilities, and more stability and greater
depth of management and technical personnel than smaller
companies. Smaller companies may have limited product lines,
markets or financial resources or may depend on a small,
inexperienced management group. Securities of smaller companies
may trade less frequently and in lesser volume than more widely
held securities and their values may fluctuate more abruptly or
erratically than securities of larger companies. They may also
trade in the over-the-counter market or on a regional exchange, or
may otherwise have limited liquidity. These securities may
therefore be more vulnerable to adverse market developments than
securities of larger companies. Also, there may be less publicly
available information about smaller companies or less market
interest in their securities as compared to larger companies, and
it may take longer for the prices of the securities to reflect the
full value of a company's earnings potential or assets.
Because securities of smaller companies may have limited
liquidity, a Fund may have difficulty establishing or closing out
its positions in smaller companies at prevailing market prices. As
a result of owning large positions in this type of security, a
Fund is subject to the additional risk of possibly having to sell
portfolio securities at disadvantageous times and prices if
redemptions require the Fund to liquidate its securities
positions. For these reasons, it may be prudent for a Fund with a
relatively large asset size to limit the number of relatively
small positions it holds in securities having limited liquidity in
order to minimize its exposure to such risks, to minimize
transaction costs, and to maximize the benefits of research. As a
consequence, as a Fund's asset size increases, the Fund may reduce
its exposure to illiquid smaller capitalization securities, which
could adversely affect performance.
The Funds may purchase securities in intial public offerings
(IPOs). These securities are subject to many of the same risks of
investing in companies with smaller market capitalizations.
Securities issued in IPOs have no trading history, and information
about the companies may be available for very limited periods. In
addition, the prices of securities sold in IPOs may be highly
volatile. A Fund may not be able to invest in securities issued in
IPOs to the extent desired because, for example, only a small
portion of the securities being offered in an IPO may be made
available to the Fund or because under certain market conditions
few companies may issue securities in IPOs.
35 PIMCO Funds: Multi-Manager Series
<PAGE>
Foreign The Global Innovation Fund will invest in the securities of
Securities issuers located in at least three countries (one of which may be
the United States). The Equity Income, Growth, Innovation,
Renaissance, Select Growth and Value Funds may invest up to 15% of
their respective assets in securities of foreign issuers,
securities traded principally in securities markets outside the
United States and/or securities denominated in foreign currencies
(together, "foreign securities").
All of the Funds may invest in American Depository Receipts
("ADRs"). In addition, the Equity Income, Global Innovation,
Growth, Innovation, Renaissance, Select Growth and Value Funds may
invest in European Depository Receipts (EDRs) and Global
Depository Receipts (GDRs). ADRs are dollar-denominated receipts
issued generally by domestic banks and representing the deposit
with the bank of a security of a foreign issuer, and are publicly
traded on exchanges or over-the-counter in the United States. EDRs
are receipts similar to ADRs and are issued and traded in Europe.
GDRs may be offered privately in the United States and also traded
in public or private markets in other countries.
Investing in foreign securities involves special risks and
considerations not typically associated with investing in U.S.
securities and shareholders should consider carefully the
substantial risks involved for Funds that invest in these
securities. These risks include: differences in accounting,
auditing and financial reporting standards; generally higher
commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory
taxation; adverse changes in investment or exchange control
regulations; and political instability. Individual foreign
economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate
of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. The securities markets, values
of securities, yields and risks associated with foreign securities
markets may change independently of each other. Also, foreign
securities and dividends and interest payable on those securities
may be subject to foreign taxes, including taxes withheld from
payments on those securities. Foreign securities often trade with
less frequency and volume than domestic securities and therefore
may exhibit greater price volatility. Investments in foreign
securities may also involve higher custodial costs than domestic
investments and additional transaction costs with respect to
foreign currency conversions. Changes in foreign exchange rates
also will affect the value of securities denominated or quoted in
foreign currencies.
Emerging Each of the Funds that may invest in foreign securities may invest
Market in securities of issuers based in countries with developing (or
Securities "emerging market") economies. The Global Innovation Fund may
invest significant portions of its assets in emerging market
securities. Investing in emerging market securities imposes risks
different from, or greater than, risks of investing in domestic
securities or in foreign, developed countries. These risks
include: smaller market capitalization of securities markets,
which may suffer periods of relative illiquidity; significant
price volatility; restrictions on foreign investment; and possible
repatriation of investment income and capital. In addition,
foreign investors may be required to register the proceeds of
sales and future economic or political crises could lead to price
controls, forced mergers, expropriation or confiscatory taxation,
seizure, nationalization or the creation of government monopolies.
The currencies of emerging market countries may experience
significant declines against the U.S. dollar, and devaluation may
occur subsequent to investments in these currencies by a Fund.
Inflation and rapid fluctuations in inflation rates have had, and
may continue to have, negative effects on the economies and
securities markets of certain emerging market countries.
Additional risks of emerging market securities may include:
greater social, economic and political uncertainty and
instability; more substantial governmental involvement in the
economy; less governmental supervision and regulation;
unavailability of currency hedging techniques; companies that are
newly organized and small; differences in auditing and financial
reporting standards, which may result in unavailability of
material information about issuers; and less developed legal
systems. In addition, emerging securities markets may have
different clearance and settlement procedures, which may be unable
to keep pace with the volume of securities transactions or
otherwise make it difficult to engage in such transactions.
Settlement problems may cause a Fund to miss attractive investment
opportunities, hold a portion of its assets in cash pending
investment, or be delayed in disposing of a portfolio security.
Such a delay could result in possible liability to a purchaser of
the security.
Special Risks of Investing in Russian and Other Eastern European
Securities. The Global Innovation Fund may invest a portion of its
assets in securities of issuers located in Russia and in other
Eastern European countries. While investments in securities of
such issuers are subject generally to the same risks associated
with investments in other emerging market countries described
above, the political, legal and operational risks of investing in
Russian and other Eastern European issuers, and of having assets
custodied within these countries, may be particularly acute. A
risk of particular note with respect to direct investment in
Russian securities is the way in which ownership of shares of
companies is
Prospectus 36
<PAGE>
normally recorded. When a Fund invests in a Russian issuer, it
will normally receive a "share extract," but that extract is not
legally determinative of ownership. The official record of
ownership of a company's share is maintained by the company's
share registrar. Such share registrars are completely under the
control of the issuer, and investors are provided with few legal
rights against such registrars.
Foreign A Fund that invests directly in foreign currencies or in
Currencies securities that trade in, and receive revenues in, foreign
currencies will be subject to currency risk. The Global Innovation
Fund is particularly sensitive to this risk.
Foreign currency exchange rates may fluctuate significantly over
short periods of time. They generally are determined by supply and
demand and the relative merits of investments in different
countries, actual or perceived changes in interest rates and other
complex factors. Currency exchange rates also can be affected
unpredictably by intervention (or the failure to intervene) by
U.S. or foreign governments or central banks, or by currency
controls or political developments. For example, significant
uncertainty surrounds the recent introduction of the euro (a
common currency unit for the European Union) in January 1999 and
the effect it may have on the value of securities denominated in
local European currencies. These and other currencies in which the
Funds' assets are denominated may be devalued against the U.S.
dollar, resulting in a loss to the Funds.
Foreign Currency Transactions. The Equity Income, Global
Innovation, Growth, Innovation, Renaissance, Select Growth and
Value Funds may enter into forward foreign currency exchange
contracts to reduce the risks of adverse changes in foreign
exchange rates. In addition, the Global Innovation Fund may buy
and sell foreign currency futures contracts and options on foreign
currencies and foreign currency futures. A forward foreign
currency exchange contract, which involves an obligation to
purchase or sell a specific currency at a future date at a price
set at the time of the contract, reduces a Fund's exposure to
changes in the value of the currency it will deliver and increases
its exposure to changes in the value of the currency it will
receive for the duration of the contract. The effect on the value
of a Fund is similar to selling securities denominated in one
currency and purchasing securities denominated in another
currency. Contracts to sell foreign currency would limit any
potential gain which might be realized by a Fund if the value of
the hedged currency increases. A Fund may enter into these
contracts to hedge against foreign exchange risk arising from the
Fund's investment or anticipated investment in securities
denominated in foreign currencies. Suitable hedging transactions
may not be available in all circumstances and there can be no
assurance that a Fund will engage in such transactions at any
given time or from time to time. Also, such transactions may not
be successful and may eliminate any chance for a Fund to benefit
from favorable fluctuations in relevant foreign currencies.
The Global Innovation Fund may also enter into these contracts
for purposes of increasing exposure to a foreign currency or to
shift exposure to foreign currency fluctuations from one currency
to another. To the extent that it does so, the Fund will be
subject to the additional risk that the relative value of
currencies will be different than anticipated by the Fund's
portfolio manager. The Global Innovation Fund may use one currency
(or a basket of currencies) to hedge against adverse changes in
the value of another currency (or a basket of currencies) when
exchange rates between the two currencies are positively
correlated. The Fund will segregate assets determined to be liquid
by PIMCO Advisors or its Sub-Adviser in accordance with procedures
established by the Board of Trustees to cover its obligations
under forward foreign currency exchange contracts entered into for
non-hedging purposes.
Convertible Each Fund may invest in convertible securities. Convertible
Securities securities are generally preferred stocks and other securities,
including fixed income securities and warrants, that are
convertible into or exercisable for common stock at either a
stated price or a stated rate. The price of a convertible security
will normally vary in some proportion to changes in the price of
the underlying common stock because of this conversion or exercise
feature. However, the value of a convertible security may not
increase or decrease as rapidly as the underlying common stock. A
convertible security will normally also provide income and is
subject to interest rate risk. While convertible securities
generally offer lower interest or dividend yields than non-
convertible fixed income securities of similar quality, their
value tends to increase as the market value of the underlying
stock increases and to decrease when the value of the underlying
stock decreases. Also, a Fund may be forced to convert a security
before it would otherwise choose, which may have an adverse effect
on the Fund's ability to achieve its investment objective.
Derivatives
Each Fund (except the Capital Appreciation and Mid-Cap Funds) may,
but is not required to, use a number of derivative instruments for
risk management purposes or as part of its investment strategies.
Generally, derivatives are financial contracts whose value depends
upon, or is derived from, the value of an underlying asset,
reference rate or index, and may relate to stocks, bonds, interest
rates, currencies
37 PIMCO Funds: Multi-Manager Series
<PAGE>
or currency exchange rates, commodities, and related indexes. A
portfolio manager may decide not to employ any of these strategies
and there is no assurance that any derivatives strategy used by a
Fund will succeed.
Examples of derivative instruments that the Funds may use include
options contracts, futures contracts, options on futures contracts
and swap agreements. The Equity Income, Global Innovation, Growth,
Innovation, Renaissance, Select Growth, Tax-Efficient Equity and
Value Funds may purchase and sell (write) call and put options on
securities, securities indexes and foreign currencies. Each of
these Funds may purchase and sell futures contracts and options
thereon with respect to securities, securities indexes and foreign
currencies. The Tax-Efficient Equity Fund may enter into swap
agreements with respect to securities indexes. A description of
these and other derivative instruments that the Funds may use are
described under "Investment Objectives and Policies" in the
Statement of Additional Information.
A Fund's use of derivative instruments involves risks different
from, or greater than, the risks associated with investing
directly in securities and other more traditional investments. A
description of various risks associated with particular derivative
instruments is included in "Investment Objectives and Policies" in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
Liquidity Risk Liquidity risk exists when a particular derivative
instrument is difficult to purchase or sell. If a derivative
transaction is particularly large or if the relevant market is
illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When a Fund uses derivatives
for leverage, investments in that Fund will tend to be more
volatile, resulting in larger gains or losses in response to
market changes. To limit leverage risk, each Fund will segregate
assets determined to be liquid by PIMCO Advisors or a Sub-Adviser
in accordance with procedures established by the Board of Trustees
(or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under derivative
instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that a Fund
will engage in derivatives transactions at any time or from time
to time. A Fund's ability to use derivatives may also be limited
by certain regulatory and tax considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the risk that the market value of the
instrument will change in a way detrimental to a Fund's interest.
If a portfolio manager incorrectly forecasts the values of
securities, currencies or interest rates or other economic factors
in using derivatives for a Fund, the Fund might have been in a
better position if it had not entered into the transaction at all.
While some strategies involving derivative instruments can reduce
the risk of loss, they can also reduce the opportunity for gain or
even result in losses by offsetting favorable price movements in
other Fund investments. A Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of
Prospectus 38
<PAGE>
value to a Fund. Also, the value of derivatives may not correlate
perfectly, or at all, with the value of the assets, reference
rates or indexes they are designed to closely track. In addition,
a Fund's use of derivatives may cause the Fund to realize higher
amounts of short-term capital gains (taxed at ordinary income tax
rates when distributed to shareholders who are individuals) than
if the Fund had not used such instruments.
Credit The Funds may invest in securities based on their credit ratings
Ratings assigned by rating agencies such as Moody's Investors Service,
and Inc. ("Moody's") and Standard & Poor's Ratings Services ("S&P").
Unrated Moody's, S&P and other rating agencies are private services that
Securities provide ratings of the credit quality of fixed income securities,
including convertible securities. The Appendix to the Statement of
Additional Information describes the various ratings assigned to
fixed income securities by Moody's and S&P. Ratings assigned by a
rating agency are not absolute standards of credit quality and do
not evaluate market risk. Rating agencies may fail to make timely
changes in credit ratings and an issuer's current financial
condition may be better or worse than a rating indicates. A Fund
will not necessarily sell a security when its rating is reduced
below its rating at the time of purchase. PIMCO Advisors and the
Sub-Advisers do not rely solely on credit ratings, and develop
their own analysis of issuer credit quality.
A Fund may purchase unrated securities (which are not rated by a
rating agency) if its portfolio manager determines that the
security is of comparable quality to a rated security that the
Fund may purchase. Unrated securities may be less liquid than
comparable rated securities and involve the risk that the
portfolio manager may not accurately evaluate the security's
comparative credit rating.
Loans of For the purpose of achieving income, each Fund may lend its
Portfolio portfolio securities to brokers, dealers, and other financial
Securities institutions provided a number of conditions are satisfied,
including that the loan is fully collateralized. Please see
"Investment Objectives and Policies" in the Statement of
Additional Information for details. When a Fund lends portfolio
securities, its investment performance will continue to reflect
changes in the value of the securities loaned, and the Fund will
also receive a fee or interest on the collateral. Securities
lending involves the risk of loss of rights in the collateral or
delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. A Fund may pay
lending fees to the party arranging the loan.
Short Each Fund may make short sales as part of its overall portfolio
Sales management strategies or to offset a potential decline in the
value of a security. A short sale involves the sale of a security
that is borrowed from a broker or other institution to complete
the sale. A Fund may only enter into short selling transactions if
the security sold short is held in the Fund's portfolio or if the
Fund has the right to acquire the security without the payment of
further consideration. For these purposes, a Fund may also hold or
have the right to acquire securities which, without the payment of
any further consideration, are convertible into or exchangeable
for the securities sold short. Short sales expose a Fund to the
risk that it will be required to acquire, convert or exchange
securities to replace the borrowed securities (also known as
"covering" the short position) at a time when the securities sold
short have appreciated in value, thus resulting in a loss to the
Fund.
When- Each Fund may purchase securities which it is eligible to purchase
Issued, on a when-issued basis, may purchase and sell such securities for
Delayed delayed delivery and may make contracts to purchase such
Delivery securities for a fixed price at a future date beyond normal
and settlement time (forward commitments). When-issued transactions,
Forward delayed delivery purchases and forward commitments involve a risk
Commitment of loss if the value of the securities declines prior to the
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
39 PIMCO Funds: Multi-Manager Series
<PAGE>
for some purposes. A Fund will segregate assets determined to be
liquid by PIMCO Advisors or a Sub-Adviser in accordance with
procedures established by the Board of Trustees to cover its
obligations under reverse repurchase agreements. A Fund also may
borrow money for investment purposes subject to any policies of
the Fund currently described in this Prospectus or in the
Statement of Additional Information. Reverse repurchase agreements
and other forms of borrowings may create leveraging risk for a
Fund.
Illiquid Each Fund may invest in securities that are illiquid so long as
Securities not more than 15% of the value of the Fund's net assets (taken at
market value at the time of investment) would be invested in such
securities. Certain illiquid securities may require pricing at
fair value as determined in good faith under the supervision of
the Board of Trustees. A portfolio manager may be subject to
significant delays in disposing of illiquid securities held by a
Fund, and transactions in illiquid securities may entail
registration expenses and other transaction costs that are higher
than those for transactions in liquid securities. The term
"illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of
business at approximately the amount at which a Fund has valued
the securities. Please see "Investment Objectives and Policies" in
the Statement of Additional Information for a listing of various
securities that are generally considered to be illiquid for these
purposes. Restricted securities, i.e., securities subject to legal
or contractual restrictions on resale, may be illiquid. However,
some restricted securities (such as securities issued pursuant to
Rule 144A under the Securities Act of 1933 and certain commercial
paper) may be treated as liquid, although they may be less liquid
than registered securities traded on established secondary
markets.
Investment Each of the Funds may invest up to 5% of its assets in other
in Other investment companies. As a shareholder of an investment company, a
Investment Fund may indirectly bear service and other fees which are in
Companies addition to the fees the Fund pays its service providers.
Portfolio With the exception of the Tax-Efficient Equity Fund, the length of
Turnover time a Fund has held a particular security is not generally a
consideration in investment decisions. A change in the securities
held by a Fund is known as "portfolio turnover." Each Fund may
engage in active and frequent trading of portfolio securities to
achieve its investment objective and principal investment
strategies, particularly during periods of volatile market
movements, although the Tax-Efficient Equity Fund will generally
attempt to limit portfolio turnover as part of its tax-efficient
management strategies. High portfolio turnover (e.g., over 100%)
involves correspondingly greater expenses to a Fund, including
brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other
securities. Such sales may also result in realization of taxable
capital gains, including short-term capital gains (which are taxed
at ordinary income tax rates when distributed to shareholders who
are individuals). The trading costs and tax effects associated
with portfolio turnover may adversely affect a Fund's performance.
Changes The investment objective of each of the Global Innovation, Growth,
in Innovation, Renaissance, Select Growth and Tax-Efficient Equity
Investment Funds described in this Prospectus may be changed by the Board of
Objectives Trustees without shareholder approval. The investment objective of
and each other Fund is fundamental and may not be changed without
Policies 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.
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
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 40
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Class D shares of each Fund since the
class of shares was first offered. Certain information reflects
financial results for a single Fund share. The total returns in
the table represent the rate that an investor would have earned or
lost on an investment in Class D shares of a Fund, assuming
reinvestment of all dividends and distributions. This information
has been audited by PricewaterhouseCoopers LLP, whose report,
along with each Fund's financial statements, are included in the
Trust's annual report to shareholders. The annual report is
incorporated by reference in the Statement of Additional
Information and is available free of charge upon request from the
Distributor. The Global Innovation, Growth and Select Growth Funds
did not offer Class D shares during the periods shown.
<TABLE>
<CAPTION>
Net Realized/ Total Income Dividends Distributions
Year or Net Asset Value Net Unrealized (Loss) From Net From Net
Period Beginning Investment Gain (Loss) on From Investment Investment Realized Capital
Ended of Period Income (Loss) Investments Operations Income Gains
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Capital Appreciation Fund
06/30/99 $26.01 $0.06 (a) $2.34 (a) $2.40 $(0.13) $(1.65)
04/08/98-06/30/98 25.41 0.02 (a) 0.58 (a) 0.60 0.00 0.00
Equity Income Fund (i)
06/30/99 $16.04 $0.40 (a) $1.27 (a) $1.67 $(0.36) $(1.76)
04/08/98-06/30/98 16.71 0.09 (a) (0.66)(a) (0.57) (0.10) 0.00
Innovation Fund (ii)
06/30/99 $24.28 $(0.29)(a) $14.79 (a) $14.50 $0.00 $(1.26)
04/08/98-06/30/98 21.50 (0.05)(a) 2.83 (a) 2.78 0.00 0.00
Mid-Cap Fund
06/30/99 $23.99 $0.03 (a) $(0.04)(a) $(0.01) $(0.01) $(1.07)
04/08/98-06/30/98 23.97 0.00 (a) 0.02 (a) 0.02 0.00 0.00
Renaissance Fund (ii)
06/30/99 $19.10 $0.00 (a) $1.45 (a) $1.45 $0.00 $(2.33)
04/08/98-06/30/98 18.99 0.01 (a) 0.10 (a) 0.11 0.00 0.00
Tax-Efficient Equity Fund
07/10/98-06/30/99 $10.00 $0.03 (a) $1.56 (a) $1.59 $0.00 $0.00
Value Fund (i)
06/30/99 $15.64 $0.23 (a) $1.37 (a) $1.60 $(0.23) $(1.72)
04/08/98-06/30/98 15.99 0.04 (a) (0.34)(a) (0.30) (0.05) 0.00
</TABLE>
- -------
* Annualized
(a)Per share amounts based upon average number of shares outstanding during the
period.
(i) The information provided for the Equity Income and Value Funds reflects the
results of operations under NFJ Investment Group ("NFJ") as the Fund's Sub-
Adviser. NFJ is expected to be replaced by the PIMCO Equity Advisors
division of PIMCO Advisors ("PIMCO Equity Advisors") as the Sub-Adviser to
the Funds on or about May 8, 2000. The Funds would not necessarily have
achieved the results shown had PIMCO Equity Advisors been the Funds' Sub-
Adviser during the periods shown.
(ii) The information provided for the Innovation and Renaissance Funds reflects
results of operations under the Funds' former Sub-Adviser through March 6,
1999 and May 7, 1999, respectively; the Funds would not necessarily have
achieved the performance results shown above under their current
investment management arrangements.
41 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ditributionss Ratio of Investment
i Excess ofn Net Asset Expenses to Income (Loss) to
Nt Realizede Total Value End of Net Assets End Average Net Average Net Portfolio
Caital Gainsp Distributions Period Total Return of Period (000s) Assets Assets Turnover Rate
------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0.00 $(1.78) $26.63 10.17% $339 1.10% 0.24% 120%
0.00 0.00 26.01 2.36 118 1.10* 0.27* 75
$0.00 $(2.12) $15.59 12.21% $106 1.10% 2.73% 76%
0.00 (0.10) 16.04 (3.43) 104 1.10* 2.23* 45
$0.00 $(1.26) $37.52 61.62% $18,366 1.30% (0.89)% 119%
0.00 0.00 24.28 12.93 139 1.30* (0.99)* 100
$0.00 $(1.08) $22.90 0.25% $359 1.10% 0.16% 85%
0.00 0.00 23.99 0.08 142 1.10* 0.03* 66
$0.00 $(2.33) $18.22 10.01% $192 1.25% (0.02)% 221%
0.00 0.00 19.10 0.58 126 1.25* 0.21* 192
$0.00 $0.00 $11.59 15.90% $869 1.11%* 0.30%* 13%
$0.00 $(1.95) $15.29 12.00% $118 1.10% 1.61% 101%
0.00 (0.05) 15.64 (1.85) 98 1.10* 1.23* 77
</TABLE>
Prospectus 42
<PAGE>
PIMCO Funds: Multi-Manager Series
The Trust's Statement of Additional Information ("SAI") and annual
and semi-annual reports to shareholders include additional
information about the Funds. The SAI and the financial statements
included in the Funds' most recent annual report to shareholders
are incorporated by reference into this Prospectus, which means
they are part of this Prospectus for legal purposes. The Funds'
annual report discusses the market conditions and investment
strategies that significantly affected each Fund's performance
during its last fiscal year.
You may get free copies of any of these materials, request other
information about a Fund, or make shareholder inquiries by calling
1-888-87-PIMCO, or by writing to:
PIMCO Funds Distributors LLC
2187 Atlantic Street
Stamford, CT 06902
You may also contact your financial service firm for additional
information.
You may review and copy information about the Trust, including its
SAI, at the Securities and Exchange Commission's public reference
room in Washington, D.C. You may call the Commission at 1-202-942-
8090 for information about the operation of the public reference
room. You may also access reports and other information about the
Trust on the EDGAR database on the Commission's Web site at
www.sec.gov. You may get copies of this information, with payment
of a duplication fee, by electronic request at the following e-
mail address: [email protected], or by writing the Public
Reference Section of the Commission, Washington, D.C. 20549-6009.
You may need to refer to the Trust's file number under the
Investment Company Act, which is 811-6161.
You can also visit our Web site at www.pimcofunds.com for
additional information about the Funds.
[LOGO OF PIMCO FUNDS]
File No. 811-6161
<PAGE>
(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., Cadence
CapitalManagement, Parametric Portfolio Associates
---------------------------------------------------------------------
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.
<PAGE>
PIMCO Funds is on the Web
www.pimcofunds.com
A Partial List of What's Available:
Daily Share Prices
Daily Manager Commentary
Current and Historical Fund Performance
Lipper Rankings
Morningstar Ratings
Listing of Fund Portfolio Holdings
Risk Analysis
Fund Manager Bios
Resources for Investment Professionals
Through the PIMCO Funds Website, at www.pimcofunds.com, you and your financial
advisor have around-the-clock access to the most timely and comprehensive
information available on PIMCO Funds.
[GRAPHIC]
In addition, the site includes daily commentary from our fund managers, with
insights on the economy and other factors affecting the stock and bond markets.
[GRAPHIC]
Investment Insight
The Investment Insight section provides an overview of the investment management
firms under the PIMCO Advisors L.P. umbrella. You'll find an explanation of each
firm's investment process, biographies of the investment team, manager updates
and more.
[GRAPHIC]
Fund Information
In the Fund Information section you'll access detailed profiles of all the PIMCO
Funds, including current and historical performance, Lipper rankings and
Morningstar ratings.
Additionally, we provide a summary of a fund's portfolio--complete with risk
analysis data. You can also obtain daily fund share prices. Please read the
relevant prospectus carefully before you invest in any PIMCO Fund.
PZ006.3/00 Not part of the Prospectus
- --------------------------------------------------------------------------------
[LOGO OF PIMCO FUNDS]
PIMCO Funds
Distributors LLC
2187 Atlantic Street
Stamford, CT 06902-6896
<PAGE>
PIMCO Funds Prospectus
-----------------------------------------------------------
Multi-Manager PIMCO EQUITY ADVISORS
Series Equity Income Fund Mid-Cap Equity Fund
April 3, 2000 Value Fund Opportunity Fund
Share Classes Renaissance Fund Innovation Fund
[ ] Institutional Growth Fund Global Innovative Fund
[ ] Administrative Select Growth Fund International Growth Fund
Target Fund
----------------------------------------------------------
CADENCE CAPITAL MANAGEMENT
Mega-Cap Fund Small-Cap Fund
Capital Appreciation Fund Micro-Cap Fund
Mid-Cap Fund
----------------------------------------------------------
NFJ INVESTMENT GROUP
Small-Cap Value Fund
----------------------------------------------------------
PARAMETRIC PORTFOLIO ASSOCIATES
Enhanced Equity Fund Tax-Efficient Structured
Tax-Efficient Equity Fund Emerging Markets Fund
Structured Emerging Markets Fund
----------------------------------------------------------
BLAIRLOGIE CAPITAL MANAGEMENT
International Fund
This cover is not part of the Prospectus
P I M C O
-----------------
F U N D S
<PAGE>
PIMCO Funds Prospectus
PIMCO This Prospectus describes 22 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 investment management affiliates. As of
Series December 31, 1999, PIMCO Advisors and its affiliates managed
approximately $261 billion in assets. PIMCO Advisors'
April 3, institutional heritage is reflected in the PIMCO Funds offered
2000 in this Prospectus.
Share This Prospectus explains what you should know about the Funds
Classes before you invest. Please read it carefully.
Institutional
and The Securities and Exchange Commission has not approved or
Administrative disapproved these securities or determined if this Prospectus
is truthful or complete. Any representation to the contrary is
a criminal offense.
PIMCO Funds: Multi-Manager Series
1
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Fund Summaries
Equity Income Fund............................................. 5
Value Fund..................................................... 7
Renaissance Fund............................................... 9
Growth Fund.................................................... 11
Select Growth Fund............................................. 13
Target Fund.................................................... 15
Mid-Cap Equity Fund............................................ 17
Opportunity Fund............................................... 19
Innovation Fund................................................ 21
Global Innovation Fund......................................... 23
International Growth Fund...................................... 25
Mega-Cap Fund.................................................. 27
Capital Appreciation Fund...................................... 29
Mid-Cap Fund................................................... 31
Small-Cap Fund................................................. 33
Micro-Cap Fund................................................. 35
Small-Cap Value Fund........................................... 37
Enhanced Equity Fund........................................... 39
Tax-Efficient Equity Fund...................................... 41
Structured Emerging Markets Fund............................... 43
Tax-Efficient Structured Emerging Markets Fund................. 46
International Fund............................................. 49
Summary of Principal Risks....................................... 51
Management of the Funds.......................................... 54
Investment Options -- Institutional Class and Administrative
Class Shares ................................................... 60
Purchases, Redemptions and Exchanges............................. 61
How Fund Shares Are Priced....................................... 66
Fund Distributions............................................... 67
Tax Consequences................................................. 68
Characteristics and Risks of Securities and Investment
Techniques...................................................... 69
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
as a secondary objective
-----------------------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of companies with market 40
capital and income capitalizations of more than $10
billion and below-average valuations
whose business fundamentals are
expected to improve.
-----------------------------------------------------------------------------------------------------
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 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
-----------------------------------------------------------------------------------------------------
Mid-Cap Equity Long-term growth of Common stocks of companies with market 40
capital capitalizations of $1 billion to $10
billion
-----------------------------------------------------------------------------------------------------
Opportunity Capital appreciation; no Common stocks of companies with market 60-100
consideration is given capitalizations of between $100
to income million and $2 billion
-----------------------------------------------------------------------------------------------------
Innovation Capital appreciation; no Common stocks of technology-related 40
consideration is given companies with market capitalizations
to income of more than $200 million
-----------------------------------------------------------------------------------------------------
Global Capital appreciation; no Common stocks of U.S. and non-U.S. 30-60
Innovation consideration is given technology-related companies with
to income market capitalizations of more than
$200 million
-----------------------------------------------------------------------------------------------------
International Long-term capital An international portfolio of common 50-100
Growth appreciation stocks
-----------------------------------------------------------------------------------------------------------------
Cadence Capital Mega-Cap Long-term growth of Common stocks of companies with very 40-60
Management capital large market capitalizations that have
improving fundamentals and whose stock
is reasonably valued by the market
-----------------------------------------------------------------------------------------------------
Capital Growth of capital Common stocks of companies with market 60-100
Appreciation capitalizations of at least $1 billion
that have improving fundamentals and
whose stock is reasonably valued by
the market
-----------------------------------------------------------------------------------------------------
Mid-Cap Growth of capital Common stocks of companies with market 60-100
capitalizations of more than $500
million (excluding the largest 200
companies) that have improving
fundamentals and whose stock is
reasonably valued by the market
-----------------------------------------------------------------------------------------------------
Small-Cap Growth of capital Common stocks of companies with market 60-100
capitalizations of more than $100
million (excluding the largest 1,000
companies) that have improving
fundamentals and whose stock is
reasonably valued by the market
-----------------------------------------------------------------------------------------------------
Micro-Cap Long-term growth of Common stocks of companies with market 60-100
capital capitalizations of less than $250
million that have improving
fundamentals and whose stock is
reasonably valued by the market
-----------------------------------------------------------------------------------------------------------------
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
-----------------------------------------------------------------------------------------------------------------
</TABLE>
PIMCO Funds: Multi-Manager Series
3
<PAGE>
Summary Information (continued)
<TABLE>
<CAPTION>
Approximate
Number of
Sub-Adviser Fund Investment Objective Main Investments Holdings
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Parametric Portfolio Enhanced A total return which Common stocks represented in the S&P 100-200
Associates Equity equals or exceeds the 500 Index with market capitalizations
total return performance of more than $5 billion
of an index (currently
the S&P 500 Index) that
represents the
performance of a
reasonably broad
spectrum of common
stocks that are publicly
traded in the U.S.
-----------------------------------------------------------------------------------------------------
Tax-Efficient Maximum after-tax growth A broadly diversified portfolio of at More
Equity of capital least 200 common stocks of companies than
represented in the S&P 500 Index with 200
market capitalizations of more than $5
billion
-----------------------------------------------------------------------------------------------------
Structured Long-term growth of Common stocks of companies located in, More
Emerging capital or whose business relates to, emerging than
Markets markets 300
-----------------------------------------------------------------------------------------------------
Tax-Efficient Long-term growth of Common stocks of companies located in, More
Structured capital; the Fund also or whose business relates to, emerging than
Emerging seeks to achieve markets 300
Markets superior after-tax
returns for its
shareholders by using a
variety of tax-efficient
management strategies
-----------------------------------------------------------------------------------------------------------------
Blairlogie Capital International Capital appreciation Common stocks of foreign (non-U.S.) 200-250
Management through investment in an issuers (developed and emerging
international portfolio; markets) with market capitalizations
income is an incidental of more than $500 million
consideration
-----------------------------------------------------------------------------------------------------------------
</TABLE>
Fund The Funds provide a broad range of investment choices. The
Descriptions, following Fund Summaries identify each Fund's investment
Performance objective, principal investments and strategies, principal
and Fees risks, performance information and fees and expenses. A more
detailed "Summary of Principal Risks" describing principal
risks of investing in the Funds begins after the Fund
Summaries.
It is possible to lose money on investments in the Funds. An
investment in a Fund is not a deposit of a bank and is not
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 Objective Fund Focus Approximate
Investments Seeks current Income producing Capitalization Range
and income as a common potential More than $2 billion
Strategies primary for capital
objective, and appreciation Dividend Frequency
long-term growth Quarterly
of capital as a Approximate
secondary Number of
objective Holdings
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 may also invest in convertible securities and preferred
stocks.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. From this group of stocks, the Fund
buys approximately 25 stocks with the highest dividend yields. The
portfolio managers then screen the most undervalued companies in
each industry by dividend yield to identify the highest yielding
stocks in each industry. From this group, the Fund buys
approximately 25 additional stocks with the lowest P/E ratios.
In selecting stocks, the portfolio managers consider quantitative
factors such as price momentum (based on changes in stock price
relative to changes in overall market prices), earnings momentum
(based on analysts' earnings per share estimates and revisions to
those estimates), relative dividend yields, valuation relative to
the overall market and trading liquidity. The portfolio managers
may replace a stock when a stock within the same industry group
has a considerably higher dividend yield or lower valuation than
the Fund's current holding.
The Fund may invest up to 15% of its assets in foreign
securities, usually in the form of American Depository Receipts
(ADRs). In response to unfavorable market and other conditions,
the Fund may make temporary investments of some or all of its
assets in high-quality fixed income securities. This would be
inconsistent with the Fund's investment objective and principal
strategies.
- --------------------------------------------------------------------------------
Principal 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 . 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. 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. The Fund is expected to change
sub-advisers on or about May 8, 2000. The Fund would not
necessarily have achieved the performance results shown on the
next page under its expected new investment management
arrangements. Past performance is no guarantee of future results.
PIMCO Funds: Multi-Manager Series
5
<PAGE>
PIMCO Equity Income Fund (continued)
Calendar Year Total Returns -- Institutional Class
[CHART APPEARS HERE] Highest and Lowest Quarter Returns
(for periods shown in the bar chart)
1992 14.75% --------------------------------------
1993 8.47% Highest (2nd Qtr. '99) 16.06%
1994 -1.61% --------------------------------------
1995 33.47% Lowest (3rd Qtr. '98) -10.93%
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>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
---------------------------------------------------------------------
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 Fund Average(/2/) 4.77% 18.02% 14.57%
---------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Equity Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively higher growth of income
through investing 60% or more of their portfolios in equities.
It does not take into account sales charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<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 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
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 97 303 525 1,166
---------------------------------------------------------------------
</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 larger More than $10 billion
Strategies capital and capitalization
income stocks with Dividend Frequency
improving Quarterly
business
fundamentals
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 $10 billion at the time
of investment and below-average valuations whose business
fundamentals are expected to improve. To achieve income, the Fund
invests a portion of its assets in income-producing (e.g.,
dividend-paying) common stocks.
The portfolio manager selects stocks for the Fund using a "value"
style. The portfolio manager invests primarily in stocks of
companies having below-average valuations whose business
fundamentals are expected to improve. The portfolio manager
determines valuation based on characteristics such as price-to-
earnings, price-to-book, and price-to-cash flow ratios. The
portfolio manager analyzes stocks and seeks to identify the key
drivers of financial results and catalysts for change, such as new
management and new or improved products, that indicate a company
may demonstrate improving fundamentals in the future. The
portfolio manager looks to sell a stock when he believes that the
company's business fundamentals are weakening or when the stock's
valuation has become excessive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADR's). In response
to unfavorable market and other conditions, the Fund may make
temporary investments of some or all of its assets in high-quality
fixed income securities. This would be inconsistent with the
Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency Risk . Management Risk
. Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of 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. The Fund is expected to change
sub-advisers on or about May 8, 2000. The Fund would not
necessarily have achieved the performance results shown on the
next page under its expected new investment management
arrangements. Past performance is no guarantee of future results.
PIMCO Funds: Multi-Manager Series
7
<PAGE>
PIMCO Value Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
-------------------------------------
1992 13.15% Highest (2nd Qtr. '99) 17.92%
1993 16.41% -------------------------------------
1994 -4.07% Lowest (3rd Qtr.'98) -13.23%
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>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/30/91)(/3/)
--------------------------------------------------------------------------
Institutional Class 4.30% 19.37% 15.11%
--------------------------------------------------------------------------
Administrative Class 3.94% 19.05% 14.81%
--------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 19.70%
--------------------------------------------------------------------------
Lipper Growth and Income Fund Average(/2/) 13.71% 21.37% 15.51%
--------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth and Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that combine a growth-of-earnings orientation
and an income requirement for level and/or rising dividends. It
does not take into account sales charges.
(3) The Fund began operations on 12/30/91. 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>
<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 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
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 97 303 525 1,166
---------------------------------------------------------------------
</TABLE>
Prospectus
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 stocks with All capitalizations
Strategies capital and improving
income business Dividend Frequency
fundamentals Quarterly
Approximate
Number 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 in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency Risk . Management Risk
. Value Securities Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Institutional Class shares
(12/30/97) and Administrative Class shares (8/31/98), performance
information shown in the bar chart (including the information to
its right) and in the Average Annual Total Returns table for those
classes is based on the performance of the Fund's Class C shares,
which are offered in a different prospectus. The prior Class C
performance has been adjusted to reflect the actual fees and
expenses paid by Institutional Class and Administrative Class
shares, including no sales charges (loads) and lower distribution
and/or service (12b-1) fees (if any) and administrative fees.
Prior to May 7, 1999, the Fund had a different sub-adviser and
would not necessarily have achieved the performance results shown
on the next page under its current investment management
arrangements. Past performance is no guarantee of future results.
PIMCO Funds: Multi-Manager Series
9
<PAGE>
PIMCO Renaissance Fund (continued)
Calendar Year Total Returns -- Institutional Class
[CHART APPEARS HERE] Highest and Lowest Quarter Returns
(for periods shown in the bar chart)
1990 -14.47% ------------------------------------
1991 34.75% Highest (4th Qtr. '98) 18.51%
1992 9.02% ------------------------------------
1993 22.62% Lowest (3rd Qtr. '98) -16.52%
1994 -3.95%
1995 29.06%
1996 25.82%
1997 36.42%
1998 11.83%
1999 9.80%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C> <C>
Fund Inception
1 Year 5 Years 10 Years (4/18/88)(/3/)
---------------------------------------------------------------------
Institutional Class 9.80% 22.16% 14.94% 14.39%
---------------------------------------------------------------------
Administrative Class 9.77% 21.91% 14.68% 14.13%
---------------------------------------------------------------------
Russell 1000 Value Index(/1/) 7.34% 23.08% 15.60% 16.38%
---------------------------------------------------------------------
Lipper Equity Income Fund
Average(/2/) 4.77% 18.02% 12.85% 13.54%
---------------------------------------------------------------------
</TABLE>
(1) The Russell 1000 Value Index is an unmanaged index that
measures the performance of companies in the Russell 1000
Index with lower price-to-book ratios and lower forecasted
growth values. It is not possible to invest directly in the
index. The Russell 1000 Value Index replaced the S&P 500
Index (an unmanaged index of large capitalization common
stocks) as one of the Fund's comparative indexes because
PIMCO Advisors believes the Russell 1000 Value Index is more
representative of the Fund's investment strategies. For
periods ended December 31, 1999, the 1 Year, 5 Years, 10
Years and Fund Inception average annual total returns of the
S&P 500 Index were 21.04%, 28.56%, 18.21% and 19.06%,
respectively.
(2) The Lipper Equity Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that seek relatively higher growth of income
through investing 60% or more of their portfolios in
equities. It does not take into account sales charges.
(3) The Fund began operations on 4/18/88. Index comparisons
begin on 4/30/88.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<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 0.60% 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 Fund
Ticker Symbols: PGFIX (Inst. Class)
PGFAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Larger Capitalization Range
and growth of capitalization At least $5 billion
Strategies capital; income common stocks
is an incidental Dividend Frequency
consideration Approximate At least annually
Number of
Holdings
35-40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of at least $5 billion at
the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify companies that
are gaining market share, have superior management and possess a
sustainable competitive advantage, such as superior or innovative
products, personnel and distribution systems. The Fund looks to
sell a stock when the portfolio manager believes that its
earnings, market sentiment or relative performance are
disappointing or if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Foreign Investment Risk . Credit Risk
. Issuer Risk . Currency Risk . Management Risk
. Growth 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 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.
PIMCO Funds: Multi-Manager Series
11
<PAGE>
PIMCO Growth Fund (continued)
Calendar Year Total Returns -- Class C
[BAR CHART APPEARS HERE] Highest and Lowest Quarter Returns
(for periods shown in the bar chart)
1990 0.29% ------------------------------------
1991 41.88% Highest (4th Qtr. '99) 36.21%
1992 2.08% ------------------------------------
1993 9.32% Lowest (3rd Qtr. '90) -13.14%
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>
<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 Growth Fund Average(/2/) 29.23% 25.03% 16.48% 16.27%
-----------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest in companies with long-term earnings expected to
grow significantly faster than the earnings of the stocks
represented in the major unmanaged stock indexes. It does
not take into account sales charges.
(3) The Fund began operations on 2/24/84. Index comparisons
begin on 2/29/84.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold 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.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 77 $240 $417 $ 930
---------------------------------------------------------------------
Administrative 102 318 552 1,225
---------------------------------------------------------------------
</TABLE>
Prospectus
12
<PAGE>
PIMCO Select Growth Fund
Ticker Symbols: PCFIX (Inst. Class)
PCEAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund 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 At least annually
Number 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 invest up to 25% of its assets in foreign
securities, usually in the form of American Depository Receipts
(ADRs). In response to unfavorable market and other conditions,
the Fund may make temporary investments of some or all of its
assets in high-quality fixed income securities. This would be
inconsistent with the Fund's investment objective and principal
strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities Risk . Credit Risk
. Issuer Risk . Foreign Investment Risk . Management Risk
. Focused Investment . Currency Risk
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(5/31/95), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. The performance information on the
next page reflects the Fund's advisory fee level in effect prior
to April 1, 2000 (0.57% per annum); these results would have been
lower had the current advisory fee level (0.60% per annum) then
been in effect. Prior to July 1, 1999, the Fund had a different
sub-adviser and would not necessarily have achieved the
performance results shown on the next page under its current
investment management arrangements. In addition, the Fund changed
its investment objective and policies on April 1, 2000; the
performance results shown on the next page would not necessarily
have been achieved had the Fund's current objective and policies
then been in effect. Past performance is no guarantee of future
results.
PIMCO Funds: Multi-Manager Series
13
<PAGE>
PIMCO Select Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1995 27.96% Highest (4th Qtr. '98) 24.90%
1996 17.95% ------------------------------------
1997 25.32% Lowest (3rd Qtr. '98) -11.38%
1998 41.06%
1999 24.27%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/28/94)(/3/)
--------------------------------------------------------------------
Institutional Class 24.27% 27.09% 27.06%
--------------------------------------------------------------------
Administrative Class 23.75% 26.69% 26.67%
--------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 28.56% 28.56%
--------------------------------------------------------------------
Lipper Growth Fund Average(/2/) 29.23% 25.03% 25.03%
--------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest in companies with long-term earnings expected to
grow significantly faster than the earnings of the stocks
represented in the major unmanaged stock indexes. It does not
take into account sales charges.
(3) The Fund began operations on 12/28/94. Index comparisons begin
on 12/31/94.
- --------------------------------------------------------------------------------
Fees and 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 0.60% None 0.25% 0.85%
---------------------------------------------------------------------
Administrative 0.60 0.25% 0.25 1.10
---------------------------------------------------------------------
(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.
<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
14
<PAGE>
PIMCO Target Fund
Ticker Symbols: PFTIX (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Medium Capitalization Range
and Seeks capital capitalization Between $1 billion and
Strategies appreciation; no common stocks $10 billion
consideration is
given to income Approximate Dividend Frequency
Number of At least annually
Holdings
40-60
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of between $1 billion and
$10 billion at the time of investment.
The portfolio managers select stocks for the Fund using a
"growth" style. The portfolio managers seek to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio managers seek to identify companies that
are gaining market share, have superior management and possess a
sustainable competitive advantage, such as superior or innovative
products, personnel and distribution systems. The Fund looks to
sell a stock when the portfolio managers believe that its
earnings, market sentiment or relative performance are
disappointing or if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Liquidity Risk . Focused Investment Risk
. Issuer Risk . Foreign Investment . Credit Risk
. Growth Securities Risk . Management Risk
Risk . Currency 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, 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.
PIMCO Funds: Multi-Manager Series
15
<PAGE>
PIMCO Target Fund (continued)
Calendar Year Total Returns -- Class A
[BAR CHART APPEARS HERE] Highest and Lowest Quarter Returns
(for periods shown in the bar chart)
1993 24.52% ------------------------------------
1994 3.09% Highest (4th Qtr. '99) 53.05%
1995 30.31% ------------------------------------
1996 15.68% Lowest (3rd Qtr. '98) -13.15%
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>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/17/92)(/3/)
---------------------------------------------------------------------
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 Mid-Cap Fund Average(/2/) 39.38% 23.07% 17.44%
---------------------------------------------------------------------
</TABLE>
(1) The S&P Mid-Cap 400 Index is an unmanaged index of middle
capitalization U.S. stocks. It is not possible to invest
directly in the index.
(2) The Lipper Mid-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $5 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 12/17/92. Index comparisons begin
on 12/31/92.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold 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 0.25% 0.80%
---------------------------------------------------------------------
Administrative 0.55 0.25% 0.25 1.05
---------------------------------------------------------------------
(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.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 82 $255 $444 $ 990
---------------------------------------------------------------------
Administrative 107 334 579 1,283
---------------------------------------------------------------------
</TABLE>
Prospectus
16
<PAGE>
PIMCO Mid-Cap Equity Fund
Ticker Symbols: PMEIX (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Medium and large Capitalization Range
and growth of capitalization $1 billion to $10
Strategies capital common stocks billion
Approximate Dividend Frequency
Number of At least annually
Holdings
40
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of $1 billion to $10 billion at the
time of investment.
The Fund usually invests in approximately 40 common stocks. In
selecting stocks, the portfolio managers use two distinct
investment disciplines. Approximately 50% of the value of the
Fund's portfolio will be selected using a "growth" style. The
portfolio manager of this growth segment seeks to identify
companies with well-defined "wealth creating" characteristics,
including superior earnings growth, high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify 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 in the growth segment when the portfolio manager
believes that its earnings, market sentiment or relative
performance are disappointing or if an alternative investment is
more attractive. The remainder of the Fund's portfolio
(approximately 50% of its value) will be selected using a "value"
style. The portfolio manager of this value segment invests
primarily in stocks of companies having below-average valuations
whose business fundamentals are expected to improve. The portfolio
manager determines valuation based on characteristics such as
price to earnings, price to book, and price to cash flow ratios.
The portfolio manager analyzes stocks and seeks to identify the
key drivers of financial results and catalysts for change, such as
new management and new or improved products, that indicate a
company may demonstrate improving fundamentals in the future. The
portfolio manager looks to sell a stock in the value segment when
he believes that the company's business fundamentals are weakening
or when the stock's valuation has become excessive.
The Fund may invest up to 15% of its assets in foreign
securities, usually in the form of American Depository Receipts
(ADRs). In response to unfavorable market and other conditions,
the Fund may make temporary investments of some or all of its
assets in high-quality fixed income securities. This would be
inconsistent with the Fund's investment objective and principal
strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Smaller Company Risk . Focused Investment
. Issuer Risk . Liquidity Risk Risk
. Value Securities . Foreign Investment . Credit Risk
Risk Risk . Management Risk
. Growth Securities . Currency Risk
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class Shares.
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. Prior to July 1, 1999, the Fund
had a different sub-adviser and would not necessarily have
achieved the performance results shown on the next page under its
current investment management arrangements. Past performance is no
guarantee of future results.
PIMCO Funds: Multi-Manager Series
17
<PAGE>
PIMCO Mid-Cap Equity Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1995 31.72% Highest (4th Qtr. '99) 40.12%
1996 17.31% ------------------------------------
1997 16.22% Lowest (3rd Qtr. '98) -11.53%
1998 29.89%
1999 51.81%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/28/94)(/3/)
---------------------------------------------------------------------
Institutional Class 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 Mid-Cap Fund Average(/2/) 39.38% 23.07% 23.07%
---------------------------------------------------------------------
</TABLE>
(1) The S&P Mid-Cap 400 Index is an unmanaged index of middle
capitalization U.S. stocks. It is not possible to invest
directly in the index.
(2) The Lipper Mid-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $5 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 12/28/94. Index comparisons begin
on 12/31/94.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<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 0.63% None 0.25% 0.88%
---------------------------------------------------------------------
Administrative 0.63 0.25% 0.25 1.13
---------------------------------------------------------------------
(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.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 90 $281 $488 $1,084
---------------------------------------------------------------------
Administrative 115 359 622 1,375
---------------------------------------------------------------------
</TABLE>
Prospectus
18
<PAGE>
PIMCO Opportunity Fund
Ticker Symbols: POFIX (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks capital Smaller Capitalization Range
and appreciation; no capitalization Between $100 million
Strategies consideration is common stocks and $2 billion
given to income
Approximate Dividend Frequency
Number of At least annually
Holdings
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of "growth"
companies with market capitalizations of between $100 million and
$2 billion at the time of investment.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify companies
with well-defined "wealth creating" characteristics, including
superior earnings growth (relative to companies in the same
industry or the market as a whole), high profitability and
consistent, predictable earnings. In addition, through fundamental
research, the portfolio manager seeks to identify companies that
are gaining market share, have superior management and possess a
sustainable competitive advantage, such as superior or innovative
products, personnel and distribution systems. The Fund looks to
sell a stock when the portfolio manager believes that its
earnings, market sentiment or relative performance are
disappointing or if an alternative investment is more attractive.
The Fund may also invest in other kinds of equity securities,
including preferred stocks and convertible securities. The Fund
may invest up to 15% of its assets in foreign securities, usually
in the form of American Depository Receipts (ADRs).
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Liquidity Risk . Focused Investment
. Issuer Risk . Foreign Investment Risk
. Growth Securities Risk . Credit Risk
Risk . Currency 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, 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.
PIMCO Funds: Multi-Manager Series
19
<PAGE>
PIMCO Opportunity Fund (continued)
Calendar Year Total Returns -- Class C
[BAR CHART APPEARS HERE] Highest and Lowest Quarter Returns
(for periods shown in the bar chart)
1990 -7.34% ------------------------------------
1991 68.08% Highest (4th Qtr. '99) 45.70%
1992 28.46% ------------------------------------
1993 36.16% Lowest (3rd Qtr. '98) -25.78%
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>
<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 Capital Appreciation Fund Average(/2/) 41.82% 22.88% 14.74% 14.56%
-------------------------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Capital Appreciation Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that have an investment objective of maximum
capital appreciation. It does not take into account sales
charges.
(3) The Fund began operations on 2/24/84. Index comparisons begin
on 2/29/84.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<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 0.25% 0.90%
--------------------------------------------------------------------
Administrative 0.65 0.25% 0.25 1.15
--------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and that the
Fund's operating expenses remain the same. Although your actual
costs may be higher or lower, the Examples show what your costs
would be based on these assumptions.
<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
20
<PAGE>
PIMCO Innovation Fund
Ticker Symbols: PIFIX (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks capital Common stocks of Capitalization Range
and appreciation; no technology- More than $200 million
Strategies consideration is related
given to income companies 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
which utilize new, creative or different, or "innovative,"
technologies to gain a strategic competitive advantage in their
industry, as well as companies that provide and service those
technologies. The Fund identifies its investment universe of
technology-related companies primarily by reference to
classifications made by independent firms, such as Standard &
Poor's (for example, companies classified as "Information
Technology" companies), and by identifying companies that derive a
substantial portion of their revenues from the manufacture, sale
and/or service of technological products. Although the Fund
emphasizes companies which utilize technologies, it is not
required to invest exclusively in companies in a particular
business sector or industry.
The portfolio manager selects stocks for the Fund using a
"growth" style. The portfolio manager seeks to identify
technology-related companies with well-defined "wealth creating"
characteristics, including superior earnings growth (relative to
companies in the same industry or the market as a whole), high
profitability and consistent, predictable earnings. In addition,
through fundamental research, the portfolio manager seeks to
identify companies that are gaining market share, have superior
management and possess a sustainable competitive advantage, such
as superior or innovative products, personnel and distribution
systems. The Fund looks to sell a stock when the portfolio manager
believes that earnings or market sentiment are disappointing, if
the company does not meet or exceed consensus estimates on
revenues and/or earnings or if an alternative investment is more
attractive.
Although the Fund invests principally in common stocks, the Fund
may also invest in other kinds of equity securities, including
preferred stocks and convertible securities. The Fund may invest
up to 15% of its assets in foreign securities, usually in the form
of American Depository Receipts (ADRs). In response to unfavorable
market and other conditions, the Fund may make temporary
investments of some or all of its assets in high-quality fixed
income securities. This would be inconsistent with the Fund's
investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Smaller Company Risk . Currency Risk
. Issuer Risk . Liquidity Risk . Credit Risk
. Focused Investment . Foreign Investment . Management Risk
Risk Risk
. Growth Securities
Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart, the information to its
right and the Average Annual Total Returns table show performance
of the Fund's Class A shares, which are offered in a different
prospectus. This is because the Fund has not offered 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.
PIMCO Funds: Multi-Manager Series
21
<PAGE>
PIMCO Innovation Fund (continued)
Calendar Year Total Returns -- Class A
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1995 45.33% Highest (4th Qtr. '99) 80.12%
1996 23.60% ------------------------------------
1997 9.03% Lowest (1st Qtr. '97) -12.56%
1998 79.41%
1999 139.40%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (12/22/94)(/3/)
-------------------------------------------------------------------
Class 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/) 134.77% 40.91% 40.91%
-------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Science and Technology Fund Average is a total
return performance average of funds tracked by Lipper
Analytical Services, Inc. that invest 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>
<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 0.25% 0.90%
---------------------------------------------------------------------
Administrative 0.65 0.25% 0.25 1.15
---------------------------------------------------------------------
(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.
<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- More than $200 million
Strategies consideration is U.S. technology-
given to income related Dividend Frequency
companies 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 will invest
in the securities of issuers located in at least three countries
(one of which may be the United States). Although the Fund
normally invests in securities traded principally in the
securities markets of developed countries, the Fund has no
prescribed limits on geographic asset distribution and may invest
in any foreign securities market in the world, including in
emerging markets. The Fund may utilize foreign currency exchange
contracts and derivative instruments (such as stock index futures
contracts), primarily for risk management or hedging purposes.
In response to unfavorable market and other conditions, the Fund
may make temporary investments of some or all of its assets in
high-quality fixed income securities. This would be inconsistent
with the Fund's investment objective and principal strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Derivatives Risk . Leveraging Risk
. Issuer Risk . Foreign Investment . Credit Risk
. Growth Securities . Emerging Markets . Management Risk
Risk Risk
. Smaller Company Risk . Currency Risk
. Liquidity 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 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
23
<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 Fee Net
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses Waiver(/2/) Expenses(/2/)
----------------------------------------------------------------------------------------------
Institutional 1.00% None 0.44% 1.44% 0.04% 1.40%
----------------------------------------------------------------------------------------------
Administrative 1.00 0.25% 0.44 1.69 0.04 1.65
----------------------------------------------------------------------------------------------
(1) Other Expenses, which are based on estimated amounts for the
Fund's initial fiscal year, reflect a 0.40% Administrative
Fee paid by the class and 0.04% representing the Fund's
organizational expenses as attributed to the class
("Organizational Expenses").
(2) Net Expenses reflect the effect of a contractual agreement by
PIMCO Advisors to waive, reduce or reimburse its
Administrative Fees for each class in an amount that, in
essence, is equal to the Fund's Organizational Expenses
attributed to the class. Because the Organizational Expenses
will all be accounted for in the Fund's initial fiscal year,
the Fund's reasonable expectation is that the relevant
conditions will not continue after the Fund's fiscal year
ending June 30, 2000.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.(/1/)
<CAPTION>
Share Class Year 1 Year 3
----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Institutional $143 $443
----------------------------------------------------------------------------------------------
Administrative 168 520
----------------------------------------------------------------------------------------------
</TABLE>
(1) The Examples are based on the Net Expenses shown in the
preceding table.
Prospectus
24
<PAGE>
PIMCO International Growth Fund
Ticker Symbols: PIGIX (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Common stocks of Capitalization Range
and capital foreign (non- At least $2 billion
Strategies appreciation U.S.) issuers
Dividend Frequency
Approximate At least annually
Number of
Holdings
50-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in an international portfolio
of common stocks. Although the Fund normally invests in securities
traded principally in developed foreign securities markets, the
Fund has no prescribed limits on geographic asset distribution and
may invest in any foreign securities market in the world. The Fund
will invest in the securities of issuers of at least three
countries other than the United States, and may also invest in
securities of foreign issuers traded on U.S. securities markets.
In making investment decisions for the Fund, the portfolio
managers attempt to identify growth companies whose securities are
trading at a reasonable price. The portfolio managers analyze the
companies in the Fund's international investment universe
according to a number of growth characteristics, which may include
earnings growth, price momentum and analysts' revisions of
earnings targets. The portfolio managers may then eliminate stocks
that appear to be overvalued, based on factors such as price-to-
earnings, price-to-book and price-to-cash flow ratios and recent
stock price movements. They then construct a portfolio for the
Fund that is reasonably diversified across countries. The
portfolio managers look to sell a stock when the company's growth
characteristics are deteriorating or when the stock's valuation
becomes excessive. Stocks are also sold in order to rebalance the
Fund's portfolio or country weightings.
The Fund invests most of its assets in foreign securities which
trade primarily in currencies other than the U.S. dollar. It may
also invest directly in foreign currencies and invest up to 10% of
its assets in other investment companies.
The Fund intends to be fully invested in the securities discussed
above (aside from certain cash management practices) and will not
make defensive investments in response to unfavorable market and
other conditions.
- --------------------------------------------------------------------------------
Principal 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 . Growth Securities . Focused Investment
Risk Risk Risk
. Currency Risk . Value Securities . Credit Risk
. Market Risk . Smaller Company . Management Risk
. Issuer Risk Risk
. Liquidity Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's Institutional Class shares.
The Fund's Administrative Class shares do not have a performance
history. Performance information shown in the Average Annual Total
Returns table for Administrative Class shares is based on the
performance of the Fund's Institutional Class shares, adjusted to
reflect the actual distribution and/or service (12b-1) fees and
other expenses paid by Administrative Class shares. Prior to July
1, 1999, the Fund had a different sub-adviser and would not
necessarily have achieved the performance results shown on the
next page under its current investment management arrangements.
Past performance is no guarantee of future results.
PIMCO Funds: Multi-Manager Series
25
<PAGE>
PIMCO International Growth Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1998 39.40% Highest (4th Qtr. '99) 47.11%
1999 109.71% ------------------------------------
Lowest (3rd Qtr. '98) -17.79%
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/) 40.91% 25.73%
------------------------------------------------------------------------
</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(/1/) Expenses
---------------------------------------------------------------------
Institutional 0.85% None 0.50% 1.35%
---------------------------------------------------------------------
Administrative 0.85 0.25% 0.50 1.60
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.50% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $137 $428 $739 $1,624
---------------------------------------------------------------------
Administrative 163 505 871 1,900
---------------------------------------------------------------------
</TABLE>
Prospectus
26
<PAGE>
PIMCO Mega-Cap Fund
Ticker Symbols: N/A (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Very large Capitalization Range
and Seeks long-term capitalization The largest 250
Strategies growth of capital common stocks publicly traded
companies (in terms
Approximate of market
Number of capitalizations)
Holdings
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 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 . 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 Fund commenced operations in September 1999 and does not yet
Information have a full calendar year of performance. Thus, no bar chart or
Average Annual Total Returns table is included for the Fund.
PIMCO Funds: Multi-Manager Series
27
<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>
<S> <C> <C> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating Fee Net
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses Waiver(/2/) Expenses(/2/)
---------------------------------------------------------------------------------------------
Institutional 0.45% None 0.55% 1.00% 0.30% 0.70%
----------------------------------------------------------------------------------------------
Administrative 0.45 0.25% 0.55 1.25 0.30 0.95
----------------------------------------------------------------------------------------------
</TABLE>
(1) Other Expenses, which are based on estimated amounts for the
Fund's initial fiscal year, reflect a 0.25% Administrative Fee
paid by the class and 0.30% representing the Fund's
organizational expenses as attributed to the class
("Organizational Expenses").
(2) Net Expenses reflect the effect of a contractual agreement by
PIMCO Advisors to waive, reduce or reimburse its
Administrative Fees for each class in an amount that, in
essence, is equal to the Fund's Organizational Expenses
attributed to the class. Because the Organizational Expenses
will all be accounted for in the Fund's initial fiscal year,
the Fund's reasonable expectation is that the relevant
conditions will not continue after the Fund's fiscal year
ending June 30, 2000.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.(/1/)
<TABLE>
<CAPTION>
Share Class Year 1 Year 3
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224
--------------------------------------------------------------------------------------
Administrative 97 303
--------------------------------------------------------------------------------------
</TABLE>
(1) The Examples are based on the Net Expenses shown in the
preceding table.
Prospectus
28
<PAGE>
PIMCO Capital Appreciation Fund
Ticker Symbols: PAPIX (Inst. Class)
PICAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks growth of Larger Capitalization Range
and capital capitalization At least $1 billion
Strategies common stocks
Dividend Frequency
Approximate At least annually
Number 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.
PIMCO Funds: Multi-Manager Series
29
<PAGE>
PIMCO Capital Appreciation Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1992 7.51% Highest (4th Qtr. '99) 23.43%
1993 17.70% ------------------------------------
1994 -4.26% Lowest (3rd Qtr. '98) -14.16%
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>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (3/8/91)(/3/)
----------------------------------------------------------------------------
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 Capital Appreciation Fund Average(/2/) 41.82% 22.88% 16.55%
----------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Capital Appreciation Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that have an investment objective of maximum
capital appreciation. It does not take into account sales
charges.
(3) The Fund began operations on 3/8/91. Index comparisons begin
on 2/28/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold 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 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
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 97 303 525 1,166
---------------------------------------------------------------------
</TABLE>
Prospectus
30
<PAGE>
PIMCO Mid-Cap Fund
Ticker Symbols: PMGIX (Inst. Class)
PMCGX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks growth of Medium Capitalization Range
and capital capitalization More than $500 million
Strategies common stocks (excluding the largest
200 companies)
Approximate
Number of Dividend Frequency
Holdings At least annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with medium market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations of more than $500 million, but excluding the 200
largest capitalization companies. The team screens the stocks in
this universe for a series of growth criteria, such as dividend
growth, earnings growth, relative growth of earnings over time
(earnings momentum) and the company's history of meeting earnings
targets (earnings surprise), and also value criteria, such as
price-to-earnings, price-to-book and price-to-cash flow ratios.
The team then selects individual stocks by subjecting the top 10%
of the stocks in the screened universe to a rigorous analysis of
company factors, such as strength of management, competitive
industry position, and business prospects, and financial statement
data, such as earnings, cash flows and profitability. The team may
interview company management in making investment decisions. The
Fund's capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team looks to sell a
stock when it falls below the median ranking, has negative
earnings surprises, or shows poor price performance relative to
all stocks in the Fund's capitalization range or to companies in
the same business sector. A stock may also be sold if its
weighting in the portfolio becomes excessive (normally above 2% of
the Fund's investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities . Focused Investment
Risk Risk
. Issuer Risk . Smaller Company . Credit Risk
. Value Securities Risk . Management Risk
Risk . Liquidity Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
Performance The top of the next page shows summary performance information for
Information the Fund in a bar chart and an Average Annual Total Returns table.
The information provides some indication of the risks of investing
in the Fund by showing changes in its performance from year to
year and by showing how the Fund's average annual returns compare
with the returns of a broad-based securities market index and an
index of similar funds. The bar chart and the information to its
right show performance of the Fund's 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.
PIMCO Funds: Multi-Manager Series
31
<PAGE>
PIMCO Mid-Cap Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1992 9.18% Highest (4th Qtr. '99) 23.10%
1993 15.77% ------------------------------------
1994 -2.36% Lowest (3rd Qtr. '98) -14.40%
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>
Fund Inception
1 Year 5 Years (8/26/91)(/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 Fund Average(/2/) 39.38% 23.07% 16.94%
--------------------------------------------------------------------
</TABLE>
(1) The Russell Mid-Cap Index is an unmanaged index of middle
capitalization U.S. stocks. It is not possible to invest
directly in the index.
(2) The Lipper Mid-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $5 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 8/26/91. Index comparisons begin
on 8/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold 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 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
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 97 303 525 1,166
---------------------------------------------------------------------
</TABLE>
Prospectus
32
<PAGE>
PIMCO Small-Cap Fund
Ticker Symbols: PSCIX (Inst. Class)
PSGAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks growth of Smaller Capitalization Range
and capital capitalization More than $100 million
Strategies common stocks (excluding the largest
1,000 companies)
Approximate
Number of Dividend Frequency
Holdings At least annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with smaller market capitalizations that have improving
fundamentals (based on growth criteria) and whose stock is
reasonably valued by the market (based on value criteria).
In making investment decisions for the Fund, the portfolio
management team considers companies in the U.S. market with market
capitalizations of more than $100 million, but excluding the 1,000
largest capitalization companies. The team screens the stocks in
this universe for a series of growth criteria, such as dividend
growth, earnings growth, relative growth of earnings over time
(earnings momentum) and the company's history of meeting earnings
targets (earnings surprise), and also value criteria, such as
price-to-earnings, price-to-book and price-to-cash flow ratios.
The team then selects individual stocks by subjecting the top 10%
of the stocks in the screened universe to a rigorous analysis of
company factors, such as strength of management, competitive
industry position, and business prospects, and financial statement
data, such as earnings, cash flows and profitability. The team may
interview company management in making investment decisions. The
Fund's capitalization criteria applies at the time of investment.
The portfolio management team rescreens the universe frequently
and seeks to consistently achieve a favorable balance of growth
and value characteristics for the Fund. The team looks to sell a
stock when it falls below the median ranking, has negative
earnings surprises, or shows poor price performance relative to
all stocks in the Fund's capitalization range or to companies in
the same business sector. A stock may also be sold if its
weighting in the portfolio becomes excessive (normally above 2% of
the Fund's investments).
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Growth Securities Risk . Focused Investment
. Issuer Risk . Smaller Company Risk Risk
. Value Securities . Liquidity 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 and the information to its
right show performance of the Fund's Institutional Class shares.
For periods prior to the inception of Administrative Class shares
(9/27/95), performance information shown in the Average Annual
Total Returns table for that class is based on the performance of
the Fund's Institutional Class shares. The prior Institutional
Class performance has been adjusted to reflect the actual
distribution and/or service (12b-1) fees and other expenses paid
by Administrative Class shares. Past performance is no guarantee
of future results.
PIMCO Funds: Multi-Manager Series
33
<PAGE>
PIMCO Small-Cap Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1992 16.69% Highest (2nd Qtr. '97) 18.48%
1993 24.45% ------------------------------------
1994 0.54% Lowest (3rd Qtr. '98) -24.84%
1995 21.85%
1996 16.84%
1997 26.72%
1998 -8.50%
1999 5.92%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (1/7/91)(/3/)
----------------------------------------------------------------------
Institutional Class 5.92% 11.82% 16.98%
----------------------------------------------------------------------
Administrative Class 5.69% 11.65% 16.75%
----------------------------------------------------------------------
Russell 2000 Index(/1/) 21.25% 16.69% 17.80%
----------------------------------------------------------------------
Lipper Small-Cap Fund Average(/2/) 33.65% 19.63% 19.88%
----------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Small-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $1 billion at the time of investment. It does not
take into account sales charges. (3) The Fund began operations
on 1/7/91. Index comparisons begin on 12/31/90.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<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 1.00% None 0.25% 1.25%
---------------------------------------------------------------------
Administrative 1.00 0.25% 0.25 1.50
---------------------------------------------------------------------
(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.
<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
34
<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
Strategies common stocks million
Approximate Number Dividend Frequency
of Holdings At least annually
60-100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with 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 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 . Smaller Company Risk Risk
. Value Securities . Liquidity 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 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.
PIMCO Funds: Multi-Manager Series
35
<PAGE>
PIMCO Micro-Cap Fund (continued)
Calendar Year Total Returns -- Institutional Class
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1994 1.02% Highest (3rd Qtr. '97) 21.61%
1995 36.25% ------------------------------------
1996 23.83% Lowest (3rd Qtr. '98) -20.71%
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>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (6/25/93)(/3/)
----------------------------------------------------------------------
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 Micro-Cap Fund Average(/2/) 68.65% 18.06% 11.97%
----------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalized weighted broad based
index of small capitalization U.S. stocks. It is not possible
to invest directly in the index.
(2) The Lipper Micro-Cap Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that invest primarily in companies with market
capitalizations of less than $300 million at the time of
investment. It does not take into account sales charges.
(3) The Fund began operations on 6/25/93. Index comparisons begin
on 6/30/93.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<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 1.25% None 0.25% 1.50%
---------------------------------------------------------------------
Administrative 1.25 0.25% 0.25 1.75
---------------------------------------------------------------------
(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.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $153 $474 $818 $1,791
---------------------------------------------------------------------
Administrative 178 551 949 2,062
---------------------------------------------------------------------
</TABLE>
Prospectus
36
<PAGE>
PIMCO Small-Cap Value Fund
Ticker Symbols: PSVIX (Inst. Class)
PVADX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Undervalued Capitalization Range
and growth of smaller Between $100 million
Strategies capital and capitalization and $1.5 billion
income common stocks
Dividend Frequency
Approximate At least annually
Number of
Holdings
100
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of between $100 million and $1.5
billion at the time of investment and below average P/E ratios
relative to the market and their respective industry groups. To
achieve income, the Fund invests a portion of its assets in
income-producing (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.
PIMCO Funds: Multi-Manager Series
37
<PAGE>
PIMCO Small-Cap Value Fund (continued)
Calendar Year Total Returns -- Institutional Class
[CHART APPEARS HERE] Highest and Lowest Quarter Returns
(for periods shown in the bar chart)
1992 18.27% ------------------------------------
1993 13.39% Highest (2nd Qtr. "99) 16.39%
1994 -4.07% ------------------------------------
1995 24.98% Lowest (3rd Qtr. "98) -18.61%
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>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (10/1/91)(/3/)
----------------------------------------------------------------------
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 Fund Average(/2/) 33.65% 19.63% 17.20%
----------------------------------------------------------------------
</TABLE>
(1) The Russell 2000 Index is a capitalization weighted broad
based index of 2,000 small capitalization U.S. stocks. It is
not possible to invest directly in the index.
(2) The Lipper Small-Cap Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with market capitalizations
of less than $1 billion at the time of investment. It does not
take into account sales charges.
(3) The Fund began operations on 10/1/91. Index comparisons begin
on 9/30/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<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 0.60% None 0.25% 0.85%
---------------------------------------------------------------------
Administrative 0.60 0.25% 0.25 1.10
---------------------------------------------------------------------
(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.
<CAPTION>
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $ 87 $271 $471 $1,049
---------------------------------------------------------------------
Administrative 112 350 606 1,340
---------------------------------------------------------------------
</TABLE>
Prospectus
38
<PAGE>
PIMCO Enhanced Equity Fund
Ticker Symbols: PEEIX (Inst. Class)
PEQAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks to provide A portion of the Capitalization Range
and a total return common stocks More than $5 billion
Strategies which equals or represented in
exceeds the the S&P 500 Dividend Frequency
total return Index At least annually
performance of
an index Approximate
(currently the Number of
S&P 500 Index) Holdings
that represents 100-200
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 . Leveraging Risk
. Issuer Risk Risk . Credit Risk
. Value Securities Risk . Currency Risk . Management Risk
. Growth 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 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.
PIMCO Funds: Multi-Manager Series
39
<PAGE>
PIMCO Enhanced Equity Fund (continued)
Calendar Year Total Returns -- Institutional Class
[CHART APPEARS HERE] Highest and Lowest Quarter Returns
(for periods shown in the bar chart)
1992 6.60% ------------------------------------
1993 3.71% Highest (4th Qtr. "98) 22.48%
1994 -0.49% ------------------------------------
1995 34.42% Lowest (3rd Qtr. "98) -13.13%
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>
<S> <C> <C> <C>
Fund Inception
1 Year 5 Years (2/11/91)(/3/)
-------------------------------------------------------------------------
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 Growth and Income Fund Average(/2/) 13.71% 21.35% 16.35%
-------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth and Income Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that combine a growth-of-earnings orientation
and an income requirement for level and/or rising dividends. It
does not take into account sales charges.
(3) The Fund began operations on 2/11/91. Index comparisons begin
on 1/31/91.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets)
<TABLE>
<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 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
---------------------------------------------------------------------
<S> <C> <C> <C> <C>
Institutional $72 $224 $390 $ 871
---------------------------------------------------------------------
Administrative 97 303 525 1,166
---------------------------------------------------------------------
</TABLE>
Prospectus
40
<PAGE>
PIMCO Tax-Efficient Equity Fund
Ticker Symbols: N/A (Inst. Class)
PTXAX (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund 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 Dividend Frequency
Index At least annually
Approximate
Number of
Holdings
More than 200
The Fund attempts to provide a total return which exceeds the
return of the S&P 500 Index by investing in a broadly diversified
portfolio of at least 200 common stocks. The Fund also attempts to
achieve superior after-tax returns for its shareholders by using a
variety of tax-efficient management strategies.
The Fund seeks to achieve its investment objective by normally
investing at least 95% of its assets in stocks represented in the
S&P 500 Index. The Fund's portfolio is designed to have certain
characteristics that are similar to those of the index, including
such measures as dividend yield, P/E ratio, relative volatility,
economic sector exposure, return on equity and market price-to-
book value ratio. The Fund's return is intended to correlate
highly with the return of the S&P 500 Index, but the portfolio
managers attempt to produce a higher total return than the index
by selecting a portion of the stocks represented in the index
using the quantitative techniques described below. The portfolio
managers also use these techniques to make sell decisions.
Notwithstanding these strategies, there is no assurance that the
Fund's investment performance will equal or exceed that of the S&P
500 Index.
The Fund intends to be fully invested in common stock (aside from
certain cash management practices) and will not make defensive
investments in response to unfavorable market and other
conditions.
Quantitative Techniques. The portfolio managers use a proprietary
quantitative model that ranks companies based on long-term (5-10
years) price appreciation potential. They analyze factors such as
growth of sustainable earnings and dividend behavior. Stocks in
the top 50% of the model's ranking are considered for purchase by
the Fund. The Fund 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 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 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.
PIMCO Funds: Multi-Manager Series
41
<PAGE>
PIMCO Tax-Efficient Equity Fund (continued)
Calendar Year Total Returns -- Administrative Class
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1999 17.66% Highest (4th Qtr. '99) 15.15%
------------------------------------
Lowest (3rd Qt '99) -7.32%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (7/10/98)(/3/)
---------------------------------------------------------------------------
Administrative Class 17.66% 15.62%
---------------------------------------------------------------------------
Institutional Class 18.09% 16.05%
---------------------------------------------------------------------------
S&P 500 Index(/1/) 21.04% 20.42%
---------------------------------------------------------------------------
Lipper Growth Fund Average(/2/) 29.23% 23.65%
---------------------------------------------------------------------------
</TABLE>
(1) The S&P 500 Index is an unmanaged index of large
capitalization common stocks. It is not possible to invest
directly in the index.
(2) The Lipper Growth Fund Average is a total return performance
average of funds tracked by Lipper Analytical Services, Inc.
that invest primarily in companies with long-term earnings
expected to grow significantly faster than the earnings of
the stocks represented in the major unmanaged stock indexes.
It does not take into account sales charges.
(3) The Fund began operations on 7/10/98. Index comparisons begin
on 6/30/98.
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold 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 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 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 $72 $224 $390 $ 871
--------------------------------------------------------------------------------------
Administrative 97 303 525 1,166
--------------------------------------------------------------------------------------
</TABLE>
Prospectus
42
<PAGE>
PIMCO Structured Emerging Markets Fund
Ticker Symbols: PSTIX (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Common stocks of Capitalization Range
and growth of emerging market All capitalizations
Strategies capital issuers
Approximate Dividend Frequency
Number of At least annually
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 business relates to, emerging markets. The
Fund is normally exposed to roughly 20 emerging market countries
and invests in more than 300 stocks. The Fund invests most of its
assets in foreign securities which trade primarily in currencies
other than the U.S. dollar and may also invest directly in foreign
currencies.
The International Finance Corporation Investable Composite Index
is the primary source for identifying emerging market countries
for the Fund. The portfolio managers may identify other emerging
market countries on the basis of market capitalization and
liquidity, as well their inclusion (or consideration for
inclusion) as emerging market countries in other broad-based
market indexes.
The portfolio managers follow a disciplined and systematic
investment process that emphasizes diversification and fairly
consistent allocation among countries, industries and issuers.
They select countries based on factors such as level of economic
development (with emphasis on GNP per capita and local economic
diversification) and the maturity of equity markets in the country
(with emphasis on freedom of investment flows and development of
legal, regulatory, banking and settlement systems). They assign
equal weight to most countries represented in the portfolio unless
the size of a country's equity market is prohibitive. Countries
with smaller equity markets (i.e., less than $5 billion of market
capitalization) are assigned one-half the weight of countries with
larger equity markets. The portfolio managers divide all issuers
in each eligible country into the following five broad economic
sector groups: financial, industrial, consumer, utilities and
natural resources. The Fund attempts to maintain exposure across
all five sectors in each country. The portfolio managers purchase
and sell individual stocks based on such factors as liquidity,
industry representation, performance relative to industry and
long-term profitability. A stock may also be sold when the
portfolio managers believe its relative weighting in the portfolio
has become excessive.
The Fund intends to invest substantially all of its assets in
common stocks and other equity and equity-linked securities (aside
from certain cash management practices) and will not make
defensive investments in response to unfavorable market and other
conditions. The Fund may use derivatives.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Foreign Investment . Value Securities . Focused Investment
Risk Risk Risk
. Emerging Markets . Growth Securities . Leveraging Risk
. Currency Risk . Smaller Company . Credit Risk
. Market Risk Risk . Management 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.
PIMCO Funds: Multi-Manager Series
43
<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
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1999 65.04% Highest (2nd Qtr. '99) 31.36%
------------------------------------
Lowest (3rd Qtr. '99) -3.62%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (6/30/98)(/3/)
----------------------------------------------------------------------
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/) 70.86% 29.36%
----------------------------------------------------------------------
</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
44
<PAGE>
PIMCO Structured Emerging Markets Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Fund Reimbursement Fee (as a percentage of offering or 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>
<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 0.50% 0.95%
--------------------------------------------------------------------
Administrative 0.45 0.25% 0.50 1.20
--------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.50% Administrative Fee paid by
the class.
Examples: The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated. 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>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
-------------------------------------------------------------------------------
Institutional $299 $511 $741 $1,402
-------------------------------------------------------------------------------
Administrative 324 588 872 1,684
-------------------------------------------------------------------------------
Assuming you do not redeem your shares.*
Share Class Year 1 Year 3 Year 5 Year 10
-------------------------------------------------------------------------------
Institutional $196 $400 $620 $1,255
-------------------------------------------------------------------------------
Administrative 221 477 753 1,540
-------------------------------------------------------------------------------
</TABLE>
* The Examples assume the payment of a 1.00% Fund Reimbursement
Fee both at the time of purchase and at the time of redemption
even though such fees may be waived for certain investors. See
"Purchases, Redemptions and Exchanges--Fund Reimbursement
Fees."
PIMCO Funds: Multi-Manager Series
45
<PAGE>
PIMCO Tax-Efficient Structured Emerging Markets Fund
Ticker Symbols: PEFIX (Inst. Class)
N/A (Admin. Class)
- --------------------------------------------------------------------------------
Principal Investment Objective Fund Focus Approximate
Investments Seeks long-term Common stocks of Capitalization Range
and growth of emerging market All capitalizations
Strategies capital. The issuers
Fund also seeks Dividend Frequency
to achieve Approximate At least annually
superior after- Number of
tax returns for Holdings
its shareholders More than 300
by using tax-
efficient
management
strategies.
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
located in, or whose business relates to, emerging markets. The
Fund is normally exposed to roughly 20 emerging market countries
and invests in more than 300 stocks. The Fund invests most of its
assets in foreign securities which trade primarily in currencies
other than the U.S. dollar and may also invest directly in foreign
currencies.
The International Finance Corporation Investable Composite Index
is the primary source for identifying emerging market countries
for the Fund. The portfolio managers may identify other emerging
market countries on the basis of market capitalization and
liquidity, as well their inclusion (or consideration for
inclusion) as emerging market countries in other broad-based
market indexes.
The portfolio managers follow a disciplined and systematic
investment process that emphasizes diversification and fairly
consistent allocation among countries, industries and issuers.
They select countries based on factors such as level of economic
development (with emphasis on GNP per capita and local economic
diversification) and the maturity of equity markets in the country
(with emphasis on freedom of investment flows and development of
legal, regulatory, banking and settlement systems). They assign
equal weight to most countries represented in the portfolio unless
the size of a country's equity market is prohibitive. Countries
with smaller equity markets (i.e., less than $5 billion of market
capitalization) are assigned one-half the weight of countries with
larger equity markets. The portfolio managers divide all issuers
in each eligible country into the following five broad economic
sector groups: financial, industrial, consumer, utilities and
natural resources. The Fund attempts to maintain exposure across
all five sectors in each country. The portfolio managers purchase
and sell individual stocks based on such factors as liquidity,
industry representation, performance relative to industry and
long-term profitability. A stock may also be sold when the
portfolio managers believe its relative weighting in the portfolio
has become excessive.
The Fund intends to invest substantially all of its assets in
common stocks and other equity and equity-linked securities (aside
from certain cash management practices) and will not make
defensive investments in response to unfavorable market and other
conditions. The Fund may use derivatives.
Tax-Efficient Strategies. The portfolio managers utilize a range
of active tax management strategies designed to minimize the
Fund's taxable distributions, including low portfolio turnover and
favoring investments in low-dividend, growth-oriented companies.
The portfolio managers also identify specific shares of stock to
be sold that have the lowest tax cost. When prudent, stocks are
also sold to realize capital losses in order to offset realized
capital gains. In limited circumstances, the Fund may also
distribute appreciated securities to shareholders to meet
redemption requests so as to avoid realizing capital gains.
Despite the use of these tax-efficient strategies, the Fund may
realize gains and shareholders will incur tax liability from time
to time.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Foreign Investment . Value Securities . Focused Investment
Risk Risk Risk
. Emerging Markets . Growth Securities . Leveraging Risk
Risk 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.
Prospectus
46
<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
[BAR CHART OF TOTAL RETURNS Highest and Lowest Quarter Returns
APPEARS HERE] (for periods shown in the bar chart)
------------------------------------
1999 72.61% Highest (2nd Qtr. '99) 32.77%
------------------------------------
Lowest (3rd Qtr. '99) -1.06%
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (6/30/98)(/3/)
----------------------------------------------------------------------
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/) 70.86% 29.36%
----------------------------------------------------------------------
</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
47
<PAGE>
PIMCO Tax-Efficient Structured Emerging Markets Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Fund Reimbursement Fee (as a percentage of offering or 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>
<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 0.50% 0.95%
--------------------------------------------------------------------
Administrative 0.45% 0.25% 0.50 1.20
--------------------------------------------------------------------
</TABLE>
(1) Other Expenses reflects a 0.50% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated. 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 do not redeem your shares.*
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------
Institutional $299 $511 $741 $1,402
--------------------------------------------------------------------------------------
Administrative 324 588 872 1,684
--------------------------------------------------------------------------------------
</TABLE>
Assuming you do not redeem you shares.*
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
--------------------------------------------------------------------------------------
Institutional $196 $400 $620 $1,255
--------------------------------------------------------------------------------------
Administrative 221 477 753 1,540
--------------------------------------------------------------------------------------
</TABLE>
* The Examples assume the payment of a 1.00% Fund Reimbursement
Fee both at the time of purchase and at the time of redemption
even though such fees may be waived for certain investors. See
"Purchases, Redemptions and Exchanges--Fund Reimbursement
Fees."
Prospectus
48
<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 At least annually
portfolio; income Number of
is an incidental Holdings
consideration 200-250
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 . Growth Securities . Leveraging Risk
Risk Risk . Credit Risk
. Currency Risk . Smaller Companies . Management Risk
. Market Risk Risk
. Issuer Risk . Derivatives Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- --------------------------------------------------------------------------------
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
49
<PAGE>
PIMCO International Fund (continued)
Calendar Year Total Returns -- Institutional Class
[CHART APPEARS HERE] Highest and Lowest Quarter Returns
(for periods shown in the bar chart)
1990 -14.51% ------------------------------------
1991 21.28% Highest (4th Qtr. '99) 21.81%
1992 -4.75% ------------------------------------
1993 34.98% Lowest (3rd Qtr. '98) -21.91%
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>
<S> <C> <C> <C> <C>
Fund Inception
1 Year 5 Years 10 Years (8/25/86)(/3/)
-----------------------------------------------------------------
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/) 40.86% 15.08% 10.22% 11.57%
-----------------------------------------------------------------
</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 0.50% 1.05%
---------------------------------------------------------------------
Administrative 0.55 0.25% 0.50 1.30
---------------------------------------------------------------------
(1) Other Expenses reflects a 0.50% Administrative Fee paid by the
class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
Share Class Year 1 Year 3 Year 5 Year 10
---------------------------------------------------------------------
Institutional $107 $334 $579 $1,283
---------------------------------------------------------------------
Administrative 132 412 713 1,568
---------------------------------------------------------------------
</TABLE>
Prospectus
50
<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, Mid-Cap Equity,
Mega-Cap, Capital Appreciation, Mid-Cap, Small-Cap, Micro-Cap and
Small-Cap Value Funds place particular emphasis on value
securities. Companies that issue value securities may have
experienced adverse business developments or may be subject to
special risks that have caused their securities to be out of
favor. If a portfolio manager's assessment of a company's
prospects is wrong, or if the market does not recognize the value
of the company, the price of its securities may decline or may not
approach the value that the portfolio manager anticipates.
Growth Each Fund may invest in equity securities of companies that its
Securities portfolio manager believes will experience relatively rapid
Risk earnings growth. The Growth, Select Growth, Target, Mid-Cap
Equity, Opportunity, Innovation, Global Innovation, International
Growth, Mega-Cap, Capital Appreciation, Mid-Cap, Small-Cap and
Micro-Cap Funds place particular emphasis on growth securities.
Growth securities typically trade at higher multiples of current
earnings than other securities. Therefore, the values of growth
securities may be more sensitive to changes in current or expected
earnings than the values of other securities.
Smaller
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 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, Small-Cap and Small-Cap Value Funds
generally have substantial exposure to this risk. The
PIMCO Funds: Multi-Manager Series
51
<PAGE>
Target, Mid-Cap Equity 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.
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 Small-Cap, 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.
Foreign A Fund that invests in foreign securities, and particularly the
(non- Global Innovation, International Growth, Structured Emerging
U.S.) 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, International Growth, Structured Emerging Markets,
Tax-Efficient Structured Emerging Markets or International Funds,
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.
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 Structured Emerging
Markets and Tax-Efficient Structured Emerging Markets
Prospectus
52
<PAGE>
Funds normally invest most of their assets in emerging market
securities and are particularly sensitive to these risks. The
Global Innovation and International Funds may also invest a
significant portion of their assets in emerging market securities.
Currency Funds that invest directly in foreign currencies or in securities
Risk that trade in, and receive revenues in, foreign currencies are
subject to the risk that those currencies will decline in value
relative to the U.S. Dollar, or, in the case of hedging positions,
that the U.S. Dollar will decline in value relative to the
currency being hedged. The Global Innovation, International
Growth, Structured Emerging Markets, Tax-Efficient Structured
Emerging Markets and International Funds are particularly
sensitive to currency risk. Currency rates in foreign countries
may fluctuate significantly over short periods of time for a
number of reasons, including changes in interest rates,
intervention (or the failure to intervene) by U.S. or foreign
governments, central banks or supranational entities such as the
International Monetary Fund, or by the imposition of currency
controls or other political developments in the U.S. or abroad.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies increases risk. Funds, such as the Select
Risk Growth Fund, that are "non-diversified" because they invest in a
relatively small number of issuers may have more risk because
changes in the value of a single security or the impact of a
single economic, political or regulatory occurrence may have a
greater adverse impact on the Fund's net asset value. Some of
those issuers also may present substantial credit or other risks.
The Global Innovation, International Growth, 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. 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 because they invest a substantial
portion of their assets in related industries such as "technology"
or "financial and business services."
Leveraging The Funds, and in particular the Global Innovation, Enhanced
Risk 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. Leverage, including borrowing, will cause the value of a
Fund's shares to be more volatile than if the Fund did not use
leverage. This is because leverage tends to exaggerate the effect
of any increase or decrease in the value of a Fund's portfolio
securities. The use of leverage may also cause a Fund to liquidate
portfolio positions when it would not be advantageous to do so in
order to satisfy its obligations or to meet segregation
requirements.
Interest To the extent that Funds purchase fixed income securities for
Rate Risk investment or defensive purposes, they will be subject to interest
rate risk, a market risk relating to investments in fixed income
securities such as bonds and notes. As interest rates rise, the
value of fixed income securities in a Fund's portfolio are likely
to decrease.
Credit All of the Funds are subject to credit risk. This is the risk that
Risk the issuer or the guarantor of a fixed income security, or the
counterparty to a derivatives contract, repurchase agreement or a
loan of portfolio securities, is unable or unwilling to make
timely principal and/or interest payments, or to otherwise honor
its obligations. Securities are subject to varying degrees of
credit risk, which are often reflected in their credit ratings.
Management Each Fund is subject to management risk because it is an actively
Risk managed investment portfolio. PIMCO Advisors, the Sub-Advisers and
each individual portfolio manager will apply investment techniques
and risk analyses in making investment decisions for the Funds,
but there can be no guarantee that these will produce the desired
results.
PIMCO Funds: Multi-Manager Series
53
<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 December 31, 1999, PIMCO Advisors and its subsidiary
partnerships had more than $261 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,
Select Growth, Target, Mid-Cap Equity, Opportunity, Innovation,
Global Innovation and International Growth Funds (PIMCO Equity
Advisors is also referred to as a "Sub-Adviser" in this capacity).
See "Sub-Advisers" below.
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Funds in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may retain
other affiliates to provide certain of these services.
Advisory Each Fund pays PIMCO Advisors fees in return for providing or
Fees arranging for the provision of investment advisory services. In
the case of Funds for which PIMCO Advisors has retained a separate
Sub-Adviser, PIMCO Advisors (and not the Fund) pays a portion of
the advisory fees it receives to the Sub-Adviser in return for its
services.
For the fiscal year ended June 30, 1999, the Funds paid monthly
advisory fees to PIMCO Advisors at the following annual rates
(stated as a percentage of the average daily net assets of each
Fund taken separately):
<TABLE>
<CAPTION>
Fund Advisory Fees
-------------------------------------------------------------------
<S> <C>
Equity Income, Value, Capital Appreciation, Mid-Cap and
Enhanced Equity Funds 0.45%
Growth Fund 0.50%
Target and International Funds 0.55%
Select Growth Fund 0.57%*
Renaissance and Small-Cap Value Funds 0.60%
Mid-Cap Equity Fund 0.63%
Opportunity and Innovation Funds 0.65%
International Growth Fund 0.85%
Small-Cap Fund 1.00%
Micro-Cap Fund 1.25%
</TABLE>
-------
* On April 1, 2000, the advisory fee rate for the Select Growth
Fund increased to 0.60% per annum.
The Global Innovation, Mega-Cap, Tax-Efficient Equity, Structured
Emerging Markets and Tax-Efficient Structured Emerging Markets
Funds were not operational during the entire fiscal year ended
June 30, 1999. The annual investment advisory fee rates payable by
these Funds are as follows (stated as a percentage of the average
daily net assets of each Fund taken separately): Mega-Cap, Tax-
Efficient Equity, Structured Emerging Markets and Tax-Efficient
Structured Emerging Markets--0.45%; Global Innovation--1.00%.
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 various third-party
services required by the Funds, including
Prospectus
54
<PAGE>
audit, custodial, portfolio accounting, legal, transfer agency and
printing costs. The result of this fee structure is an expense
level for Institutional and Administrative Class shareholders of
each Fund that, with limited exceptions, is precise and
predictable under ordinary circumstances.
For the fiscal year ended June 30, 1999, Institutional and
Administrative Class shareholders of the Funds paid PIMCO Advisors
monthly administrative fees at the following annual rates (stated
as a percentage of the average daily net assets attributable in
the aggregate to the Fund's Institutional and Administrative Class
shares):
<TABLE>
<CAPTION>
Fund Administrative Fees
-----------------------------------------------------------------
<S> <C>
International Growth and International Funds 0.50%
All Other Funds* 0.25%
</TABLE>
* The Global Innovation, Mega-Cap, Tax-Efficient Equity,
Structured Emerging Markets and Tax-Efficient Structured
Emerging Markets Funds were not operational during the entire
fiscal year ended June 30, 1999. Institutional and
Administrative Class shareholders of these Funds pay
administrative fees at the following annual rates (each stated
as a percentage of the average daily net assets attributable in
the aggregate to the Fund's Institutional and Administrative
Class shares): Mega-Cap and Tax-Efficient Equity--0.25%; Global
Innovation--0.40%; Structured Emerging Markets and Tax-Efficient
Structured Emerging Markets--0.50%.
Sub- Each Sub-Adviser has full investment discretion and makes all
Advisers determinations with respect to the investment of a Fund's assets.
The following provides summary information about each Sub-Adviser,
including the Fund(s) it manages and its investment specialty.
<TABLE>
<CAPTION>
Sub-Adviser* Funds Investment Specialty
-------------------------------------------------------------------------------
<S> <C> <C>
PIMCO Equity Advisors Equity Income, Value, Disciplined approach to
division of PIMCO Renaissance, Growth, identifying quality growth
Advisors ("PIMCO Equity Select Growth, Target, and/or undervalued
Advisors") Mid-Cap Equity, companies
1345 Avenue of the Opportunity, Innovation,
Americas, 50th Floor Global Innovation and
New York, NY 10105 International Growth
Cadence Capital Mega-Cap, Capital A blend of growth
Management ("Cadence") Appreciation, Mid-Cap, companies whose stock is
Exchange Place, 53 State Small-Cap and 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. 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 Funds: Multi-Manager Series
55
<PAGE>
PIMCO A division of PIMCO Advisors, PIMCO Equity Advisors provides
Equity equity-related advisory services to mutual funds and institutional
Advisors accounts. See "Investment Adviser and Administrator" above for
additional information about PIMCO Advisors.
The following individuals at PIMCO Equity Advisors have or share
primary responsibility for the noted Funds. A different sub-
advisory firm served as Sub-Adviser for each of the Growth,
Target, Opportunity and Innovation Funds prior to March 6, 1999,
for the Renaissance Fund prior to May 7, 1999 and for the Select
Growth, Mid-Cap Equity and International Growth Funds prior to
July 1, 1999. In addition, on or about May 8, 2000, it is expected
that PIMCO Equity Advisors will assume the position of Sub-Adviser
to the Equity Income and Value Funds from NFJ, the Funds' current
Sub-Adviser.
<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 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 health care and
technology, from 1991 to 1994.
Mid-Cap Equity Messrs. Corba, 7/99 See above.
Schneider and
Parker
Opportunity Michael F. Gaffney 3/99 Managing Director of PIMCO Equity
Advisors, where he manages the
Opportunity Fund and other small-cap
products. Prior to joining PIMCO
Advisors, he was with Alliance
Capital Management L.P. from 1993 to
1999, serving in various capacities
including as Senior Vice President
and Portfolio Manager.
Innovation Dennis P. McKechnie 10/98 Portfolio Manager of PIMCO Equity
Advisors. Prior to joining PIMCO
Advisors, he was with Columbus
Circle Investors from 1991 to 1999,
where he managed equity accounts and
served in various capacities
including as Portfolio Manager for
the Innovation Fund.
Global Innovation Mr. McKechnie 12/99+ See above.
International Growth David Stein 7/99 Senior Portfolio Manager of PIMCO
Equity Advisors. He also serves as
Managing Director of Parametric. He
has been with Parametric since 1996
where he leads the investment,
research and product development
activities. Previously, he served in
Investment Research at GTE
Corporation from 1995 to 1996, in
Equity Research at Vanguard Group
from 1994 to 1995 and in Investment
Research at IBM Corporation from
1977 to 1994.
Cliff Quisenberry 7/99 Portfolio Manager of PIMCO Equity
Advisors. He also serves as Vice
President and Global Portfolio
Manager of Parametric. He joined
Parametric in 1998 where he heads
international investments in both
developed and emerging markets.
Previously, he served as Vice
President and Portfolio Manager at
Cutler & Co. from 1990 to 1994 and
as a Securities Analyst and
Portfolio Manager at Fred Alger
Management from 1987 to 1998.
</TABLE>
-------
* Expected.
+ 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.
Prospectus
56
<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 December 31, 1999 of
approximately $6.4 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
Small-Cap Mr. Breed 1/91* 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.
PIMCO Funds: Multi-Manager Series
57
<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 December 31, 1999 of approximately $2.1 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 December
31, 1999 of approximately $4.1 billion.
Prospectus
58
<PAGE>
The following individuals share primary responsibility for each of
the noted Funds.
<TABLE>
<CAPTION>
Portfolio
Fund Manager(s) Since Recent Professional Experience
----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Enhanced Equity David Stein 7/96* Managing Director of Parametric. He
also serves as a Senior Portfolio
Manager of PIMCO Equity Advisors. He
has been with Parametric since 1996
where he leads the investment,
research and product development
activities. Previously, he served in
Investment Research at GTE
Corporation from 1995 to 1996, in
Equity Research at Vanguard Group
from 1994 to 1995 and in Investment
Research at IBM Corporation from
1977 to 1994.
Tom Seto 10/98* Vice President and Portfolio Manager
of Parametric. Since joining
Parametric in 1998, he has been
responsible for management of
Parametric's active U.S. equity
strategies and has managed
structured equity portfolios.
Previously, he was with Barclays
Global Investors from 1991 to 1998,
serving in various capacities
including as head of U.S. Equity
Index Investments and Portfolio
Manager.
Tax-Efficient Equity Messrs. Stein and 9/98* See above.
Seto
Structured Emerging Messrs. Stein and 6/98* See above.
Markets Seto
Cliff Quisenberry 6/98* Vice President and Global Portfolio
Manager of Parametric. He also
serves as Portfolio Manager of PIMCO
Equity Advisors. He joined
Parametric in 1998 where he heads
international investments in both
developed and emerging markets.
Previously, he served as Vice
President and Portfolio Manager at
Cutler & Co. from 1990 to 1994 and
as a Securities Analyst and
Portfolio Manager at Fred Alger
Management from 1987 to 1998.
Tax-Efficient Structured Messrs. Stein, Seto 6/98* See above.
Emerging Markets and Quisenberry
</TABLE>
-------
*Since inception of the Fund.
Blairlogie Blairlogie provides advisory services to mutual funds and
institutional accounts. Blairlogie Capital Management Ltd., the
predecessor investment adviser to Blairlogie, commenced operations
in 1992. Accounts managed by Blairlogie had combined assets as of
December 31, 1999 of approximately $1.4 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>
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.
PIMCO Funds: Multi-Manager Series
59
<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.
Prospectus
60
<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, 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.
PIMCO Funds: Multi-Manager Series
61
<PAGE>
. Initial Investment. Investors may open an account by
completing and signing a Client Registration Application and
mailing it to PIMCO Funds at 840 Newport Center Drive, Suite 300,
Newport Beach, California 92660. A Client Registration Application
may be obtained by calling 1-800-927-4648.
Except as described below, an investor may purchase Institutional
Class and Administrative Class shares only by wiring federal funds
to the Transfer Agent, National Financial Data Services, 330 West
9th Street, 4th Floor, Kansas City, Missouri 64105. Before wiring
federal funds, the investor must telephone the Trust at 1-800-927-
4648 to receive instructions for wire transfer and must provide
the following information: name of authorized person, shareholder
name, shareholder account number, name of Fund and share class,
amount being wired, and wiring bank name.
An investor may purchase shares without first wiring federal
funds if the proceeds of the investment are derived from an
advisory account the investor maintains with PIMCO Advisors or one
of its affiliates, from surrender or other payment from an
annuity, insurance, or other contract held by Pacific Life
Insurance Company, or from an investment by broker-dealers,
institutional clients or other financial intermediaries which have
established a shareholder servicing relationship with the Trust on
behalf of their customers.
. Additional Investments. An investor may purchase additional
Institutional Class and Administrative Class shares of the Funds
at any time by calling the Trust and wiring federal funds to the
Transfer Agent as outlined above.
. Other Purchase Information. Purchases of a Fund's
Institutional Class and Administrative Class shares will be made
in full and fractional shares. In the interest of economy and
convenience, certificates for shares will not be issued.
The Trust and the Distributor each reserves the right, in its
sole discretion, to suspend the offering of shares of the Funds or
to reject any purchase order, in whole or in part, when, in the
judgment of management, such suspension or rejection is in the
best interests of the Trust.
An investor should invest in the Funds for long-term investment
purposes only. The Trust and PIMCO Advisors each reserves the
right to restrict purchases of Fund shares (including exchanges)
when a pattern of frequent purchases and sales made in response to
short-term fluctuations in share price appears evident. Notice of
any such restrictions, if any, will vary according to the
particular circumstances.
Institutional Class and Administrative Class shares of the Trust
are not qualified or registered for sale in all states. Investors
should inquire as to whether shares of a particular Fund are
available for offer and sale in the investor's state of residence.
Shares of the Trust may not be offered or sold in any state unless
registered or qualified in that jurisdiction or unless an
exemption from registration or qualification is available.
Subject to the approval of the Trust, an investor may purchase
shares of a Fund with liquid securities that are eligible for
purchase by the Fund (consistent with the Fund's investment
policies and restrictions) and that have a value that is readily
ascertainable in accordance with the Trust's valuation policies.
These transactions will be effected only if PIMCO Advisors or a
Sub-Adviser intends to retain the security in the Fund as an
investment. Assets purchased by a Fund in such a transaction will
be valued in generally the same manner as they would be valued for
purposes of pricing the Fund's shares, if such assets were
included in the Fund's assets at the time of purchase. The Trust
reserves the right to amend or terminate this practice at any
time.
. Investment Limitations. Shares of the Micro-Cap Fund are
normally not available for purchase by new investors, although
purchase orders may be accepted in certain circumstances. Existing
shareholders may continue to invest in this Fund. This restriction
may be changed or eliminated at any time at the discretion of the
Trust's Board of Trustees.
Prospectus
62
<PAGE>
. Retirement Plans. Shares of the Funds are available for
purchase by retirement and savings plans, including Keogh plans,
401(k) plans, 403(b) custodial accounts, and Individual Retirement
Accounts. The administrator of a plan or employee benefits office
can provide participants or employees with detailed information on
how to participate in the plan and how to elect a Fund as an
investment option. Participants in a retirement or savings plan
may be permitted to elect different investment options, alter the
amounts contributed to the plan, or change how contributions are
allocated among investment options in accordance with the plan's
specific provisions. The plan administrator or employee benefits
office should be consulted for details. For questions about
participant accounts, participants should contact their employee
benefits office, the plan administrator, or the organization that
provides recordkeeping services for the plan. Investors who
purchase shares through retirement plans should be aware that plan
administrators may aggregate purchase and redemption orders for
participants in the plan. Therefore, there may be a delay between
the time the investor places an order with the plan administrator
and the time the order is forwarded to the Transfer Agent for
execution.
. Fund Reimbursement Fees. Investors in Institutional Class and
Administrative Class shares of the Structured Emerging Markets and
Tax-Efficient Structured Emerging Markets Funds are subject to a
"Fund Reimbursement Fee," both at the time of purchase and at the
time of redemption, equal to 1.00% of the net asset value of the
shares purchased or redeemed. Fund Reimbursement Fees are not paid
separately, but are deducted automatically from the amount
invested or the amount to be received in connection with a
redemption. Fund Reimbursement Fees are paid to and retained by
the Funds to defray certain costs described below and are not paid
to or retained by PIMCO Advisors, the Fund's Sub-Adviser, or the
Distributor. Fund Reimbursement Fees are not sales loads or
contingent deferred sales charges. Reinvestment of dividends and
capital gains distributions paid to shareholders by the Funds are
not subject to Fund Reimbursement Fees, but redemptions and
exchanges of shares acquired by these reinvestments are subject to
Fund Reimbursement Fees unless a waiver applies.
The purpose of the Fund Reimbursement Fees is to defray the costs
associated with investing the proceeds of the sale of the Fund's
shares (in the case of purchases) or the costs associated with the
sale of portfolio securities to satisfy redemption requests (in
the case of redemptions), thereby insulating existing shareholders
from such costs. The amount of a Fund Reimbursement Fee represents
the Sub-Adviser's estimate of the costs reasonably anticipated to
be incurred by the Funds in connection with the purchase or sale
of portfolio securities, including international stocks,
associated with an investor's purchase or redemption. These costs
include brokerage costs, market impact costs (i.e., the increase
in market prices which may result when a Fund purchases or sells
thinly traded stocks) and the effect of "bid/asked" spreads in
international markets. Transaction costs incurred when purchasing
or selling stocks of companies in foreign countries, and
particularly emerging market countries, may be significantly
higher than those in more developed countries. This is due, in
part, to less competition among brokers, underutilization of
technology on the part of foreign exchanges and brokers, the lack
of less expensive investment options (such as derivative
instruments) and lower levels of liquidity in foreign and
underdeveloped markets.
Waiver of Fund Reimbursement Fees. Former participants in the
Parametric Portfolio Associates Emerging Markets Trust will not be
subject to Fund Reimbursement Fees with respect to any shares of
the Structured Emerging Markets and Tax-Efficient Structured
Emerging Markets Funds they acquired through June 30, 1998, and
will not be subject to Fund Reimbursement Fees upon the subsequent
redemption (including any redemption in connection with an
exchange) of any shares acquired by any such participant through
June 30, 1998. Such participants will be subject to such Fund
Reimbursement Fees to the same extent as any other shareholder on
any shares of either Fund acquired (whether by reinvestment of
dividends or capital gain distributions or otherwise) after June
30, 1998.
PIMCO Funds: Multi-Manager Series
63
<PAGE>
Redeeming . Redemptions by Mail. An investor may redeem (sell)
Shares Institutional Class and Administrative Class shares by submitting
a written request to PIMCO Funds at 840 Newport Center Drive,
Suite 300, Newport Beach, California 92660. The redemption request
should state the Fund from which the shares are to be redeemed,
the class of shares, the number or dollar amount of the shares to
be redeemed and the account number. The request must be signed
exactly as the names of the registered owners appear on the
Trust's account records, and the request must be signed by the
minimum number of persons designated on the Client Registration
Application that are required to effect a redemption.
. Redemptions by Telephone or Other Wire Communication. An
investor that elects this option on the Client Registration
Application (or subsequently in writing) may request redemptions
of shares by calling the Trust at 1-800-927-4648, by sending a
facsimile to 1-949-725-6830, or by other means of wire
communication. Investors should state the Fund and class from
which the shares are to be redeemed, the number or dollar amount
of the shares to be redeemed and the account number. Redemption
requests of an amount of $10 million or more may be initiated by
telephone, but must be confirmed in writing by an authorized party
prior to processing.
In electing a telephone redemption, the investor authorizes
Pacific Investment Management Company and the Transfer Agent to
act on telephone instructions from any person representing himself
to be the investor, and reasonably believed by Pacific Investment
Management Company or the Transfer Agent to be genuine. Neither
the Trust nor the Transfer Agent may be liable for any loss, cost
or expense for acting on instructions (whether in writing or by
telephone) believed by the party receiving such instructions to be
genuine and in accordance with the procedures described in this
Prospectus. Shareholders should realize that by electing the
telephone or wire redemption option, they may be giving up a
measure of security that they might have if they were to redeem
their shares in writing. Furthermore, interruptions in telephone
service may mean that a shareholder will be unable to effect a
redemption by telephone when desired. The Transfer Agent also
provides written confirmation of transactions initiated by
telephone as a procedure designed to confirm that telephone
instructions are genuine (written confirmation is also provided
for redemption requests received in writing). All telephone
transactions are recorded, and Pacific Investment Management
Company or the Transfer Agent may request certain information in
order to verify that the person giving instructions is authorized
to do so. The Trust or Transfer Agent may be liable for any losses
due to unauthorized or fraudulent telephone transactions if it
fails to employ reasonable procedures to confirm that instructions
communicated by telephone are genuine. All redemptions, whether
initiated by letter or telephone, will be processed in a timely
manner, and proceeds will be forwarded by wire in accordance with
the redemption policies of the Trust detailed below. See "Other
Redemption Information."
Shareholders may decline telephone exchange or redemption
privileges after an account is opened by instructing the Transfer
Agent in writing at least seven business days prior to the date
the instruction is to be effective. Shareholders may experience
delays in exercising telephone redemption privileges during
periods of abnormal market activity. During periods of volatile
economic or market conditions, shareholders may wish to consider
transmitting redemption orders by telegram, facsimile or overnight
courier.
Defined contribution plan participants may request redemptions by
contacting the employee benefits office, the plan administrator or
the organization that provides recordkeeping services for the
plan.
. Other Redemption Information. Redemption requests for Fund
shares are effected at the NAV per share next determined after
receipt of a redemption request by the Trust or its designee. The
request must properly identify all relevant information, such as
account number, redemption amount (in dollars or shares) and the
Fund name, and must be executed or initialed by the appropriate
signatories. A redemption request received by the Trust or its
designee prior to the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m., Eastern time), on a day the
Trust is open for business, is effective on that day. A redemption
request received after that time becomes effective on the next
business day.
Prospectus
64
<PAGE>
Unless eligible for a waiver, shareholders of the Structured
Emerging Markets and Tax-Efficient Structured Emerging Markets
Funds who redeem their shares will pay a Fund Reimbursement Fee
equal to 1.00% of the NAV of the shares redeemed. See "Fund
Reimbursement Fees" above.
Redemption proceeds will ordinarily be wired to the investor's
bank within three business days after the redemption request, but
may take up to seven business days. Redemption proceeds will be
sent by wire only to the bank name designated on the Client
Registration Application. The Trust may suspend the right of
redemption or postpone the payment date at times when the New York
Stock Exchange is closed, or during certain other periods as
permitted under the federal securities laws.
For shareholder protection, a request to change information
contained in an account registration (for example, a request to
change the bank designated to receive wire redemption proceeds)
must be received in writing, signed by the minimum number of
persons designated on the Client Registration Application that are
required to effect a redemption, and accompanied by a signature
guarantee from any eligible guarantor institution, as determined
in accordance with the Trust's procedures. Shareholders should
inquire as to whether a particular institution is an eligible
guarantor institution. A signature guarantee cannot be provided by
a notary public. In addition, corporations, trusts, and other
institutional organizations are required to furnish evidence of
the authority of the persons designated on the Client Registration
Application to effect transactions for the organization.
Due to the relatively high cost of maintaining small accounts,
the Trust reserves the right to redeem Institutional Class and
Administrative Class shares in any account for their then-current
value (which will be promptly paid to the investor) if at any
time, due to redemption by the investor, the shares in the account
do not have a value of at least $100,000. A shareholder will
receive advance notice of a mandatory redemption and will be given
at least 30 days to bring the value of its account up to at least
$100,000. This mandatory redemption policy does not apply to
participants in PIMCO Advisors Portfolio Strategies, a managed
product sponsored by PIMCO Advisors.
The Trust agrees to redeem shares of each Fund solely in cash up
to the lesser of $250,000 or 1% of the Fund's net assets during
any 90-day period for any one shareholder. In consideration of the
best interests of the remaining shareholders, the Trust reserves
the right to pay any redemption proceeds exceeding this amount in
whole or in part by a distribution in kind of securities held by a
Fund in lieu of cash. Except for Funds with a tax-efficient
management strategy, it is highly unlikely that shares would ever
be redeemed in kind. When shares are redeemed in kind, the
redeeming shareholder should expect to incur transaction costs
upon the disposition of the securities received in the
distribution.
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
PIMCO Funds: Multi-Manager Series
65
<PAGE>
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.
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.
. Exchange Limitations. Until July 3, 2000, shareholders will
not be permitted to exchange their shares of a Fund or series of
PIMCO Funds: Pacific Investment Management Series for shares of
the Global Innovation Fund, although investors will be permitted
to exchange their shares of the Global Innovation Fund for shares
of the same class of any other Fund or series of the Trust or
series of PIMCO Funds: Pacific Investment Management Series. These
restrictions may be changed or eliminated at any time at the
discretion of the Distributor.
How Fund Shares Are Priced
The net asset value ("NAV") of a Fund's Institutional and
Administrative Class shares is determined by dividing the total
value of a Fund's portfolio investments and other assets
attributable to that class, less any liabilities, by the total
number of shares outstanding of that class.
For purposes of calculating the NAV, portfolio securities and
other assets for which market quotes are available are stated at
market value. Market value is generally determined on the basis of
last reported sales prices, or if no sales are reported, based on
quotes obtained from a quotation reporting system, established
market makers, or pricing services. Certain securities or
investments for which daily market quotes are not readily
available may be valued, pursuant to guidelines established by the
Board of Trustees, with reference to other securities or indices.
Short-term investments having a maturity of 60 days or less are
generally valued at amortized cost. Exchange traded options,
futures and options on futures are valued at the settlement price
determined by the exchange. Other securities for which market
quotes are not readily available are valued at fair value as
determined in good faith by the Board of Trustees or persons
acting at their direction.
Prospectus
66
<PAGE>
Investments initially valued in currencies other than the U.S.
dollar are converted to U.S. dollars using exchange rates obtained
from pricing services. As a result, the NAV of a Fund's shares may
be affected by changes in the value of currencies in relation to
the U.S. dollar. The value of securities traded in markets outside
the United States or denominated in currencies other than the U.S.
dollar may be affected significantly on a day that the New York
Stock Exchange is closed and an investor is not able to purchase,
redeem or exchange shares. In particular, calculation of the NAV
of the International Growth, Structured Emerging Markets, Tax-
Efficient Structured Emerging Markets and International Funds may
not take place contemporaneously with the determination of the
prices of foreign securities used in NAV calculations.
Fund shares are valued at the close of regular trading (normally
4:00 p.m., Eastern time) (the "NYSE Close") on each day that the
New York Stock Exchange is open. For purposes of calculating the
NAV, the Funds normally use pricing data for domestic equity
securities received shortly after the NYSE Close and do not
normally take into account trading, clearances or settlements that
take place after the NYSE Close. Domestic fixed income and foreign
securities are normally priced using data reflecting the earlier
closing of the principal markets for those securities. Information
that becomes known to the Funds or their agents after the NAV has
been calculated on a particular day will not generally be used to
retroactively adjust the price of a security or the NAV determined
earlier that day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Funds may value securities at fair value or
estimate their value as determined in good faith by the Board of
Trustees pursuant to procedures approved by the Board of Trustees.
Fair valuation may also be used by the Board of Trustees if
extraordinary events occur after the close of the relevant market
but prior to the NYSE Close.
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, Value and .
Renaissance Funds
-------------------------------------------------------------------
All other Funds .
-------------------------------------------------------------------
</TABLE>
In addition, each Fund distributes any net capital gains it earns
from the sale of portfolio securities to shareholders no less
frequently than annually. Net short-term capital gains may be paid
more frequently.
A Fund's dividend and capital gain distributions with respect to
a particular class of shares will automatically be reinvested in
additional shares of the same class of the Fund at NAV unless the
shareholder
PIMCO Funds: Multi-Manager Series
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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 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.
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 International Growth,
Structured Emerging Markets, Tax-Efficient Structured Emerging
Markets and International Funds may be entitled to claim a credit
or deduction with respect to foreign taxes.
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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 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
International Growth, Mega-Cap, Capital Appreciation, Mid-Cap,
Small-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, Mid-Cap
Equity, Opportunity, Innovation, Global Innovation and
International Funds will each invest primarily in common stocks,
and may also invest in other kinds of equity securities, including
preferred stocks and securities (including fixed income securities
and warrants) convertible into or exercisable for common stocks.
Each of these Funds may invest a portion of its assets in fixed
income securities. These Funds may temporarily hold up to 100% of
their assets in short-term U.S. Government securities and other
money market instruments for defensive purposes in response to
unfavorable market and other conditions. The International Fund
may also hold up to 100% of its assets in other domestic fixed
income, foreign fixed income and equity securities principally
traded in the U.S., including obligations issued or guaranteed by
a foreign government or its agencies, authorities or
PIMCO Funds: Multi-Manager Series
69
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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
Smaller publicly traded companies. The Micro-Cap Fund, in particular,
Market and the Opportunity, Small-Cap and Small-Cap Value Funds
Capitalizations generally invest primarily in smaller companies and are
especially sensitive to the risks described below. In addition,
the Innovation and Global Innovation Funds generally have
substantial exposure to these risks. The Target, Mid-Cap Equity
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 than the largest
companies.
Companies which are smaller and less well-known or seasoned
than larger, more widely held companies may offer greater
opportunities for capital appreciation, but may also involve
risks different from, or greater than, risks normally
associated with larger companies. Larger companies generally
have greater financial resources, more extensive research and
development, manufacturing, marketing and service capabilities,
and more stability and greater depth of management and
technical personnel than smaller companies. Smaller companies
may have limited product lines, markets or financial resources
or may depend on a small, inexperienced management group.
Securities of smaller companies may trade less frequently and
in lesser volume than more widely held securities and their
values may fluctuate more abruptly or erratically than
securities of larger companies. They may also trade in the
over-the-counter market or on a regional exchange, or may
otherwise have limited liquidity. These securities may
therefore be more vulnerable to adverse market developments
than securities of larger companies. Also, there may be less
publicly available information about smaller companies or less
market interest in their securities as compared to larger
companies, and it may take longer for the prices of the
securities to reflect the full value of a company's earnings
potential or assets.
Because securities of smaller companies may have limited
liquidity, a Fund may have difficulty establishing or closing
out its positions in smaller companies at prevailing market
prices. As a result of owning large positions in this type of
security, a Fund is subject to the additional risk of possibly
having to sell portfolio securities at disadvantageous times
and prices if redemptions require the Fund to liquidate its
securities positions. For these reasons, it may be prudent for
a Fund with a relatively large asset size to limit the number
of relatively small positions it holds in securities having
limited liquidity in order to minimize its exposure to such
risks, to minimize transaction costs, and to maximize the
benefits of research. As a consequence, as a Fund's asset size
increases, the Fund may reduce its exposure to illiquid smaller
capitalization securities, which could adversely affect
performance.
The Funds may purchase securities in initial public offerings
(IPOs). These securities are subject to many of the same risks
of investing in companies with smaller market capitalizations.
Securities issued in IPOs have no trading history, and
information about the companies may be available for very
limited periods. In addition, the prices of securities sold in
IPOs may be highly volatile. A Fund may not be able to invest
in securities issued in IPOs to the extent desired because, for
example, only a small portion of the securities being offered
in an IPO may be made available to the Fund or because under
certain market conditions few companies may issue securities in
IPOs.
Foreign The International Growth, Structured Emerging Markets, Tax-
Securities Efficient Structured Emerging Markets and International Funds
normally invest principally in securities of foreign issuers,
securities traded principally in securities markets outside the
United States and/or securities denominated in foreign
currencies (together, "foreign securities"). The Global
Innovation Fund will invest in the securities of issuers
located in at least
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70
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three countries (one of which may be the United States). The
Equity Income, Value, Renaissance, Growth, Select Growth, Target,
Mid-Cap Equity, Opportunity and Innovation Funds may invest up to
15% of their respective assets in foreign securities. The Enhanced
Equity Fund may invest in common stocks of foreign issuers if
included in the S&P 500 Index.
All of the Funds may invest in American Depository Receipts
("ADRs"). In addition, the Equity Income, Value, Renaissance,
Growth, Select Growth, Target, Mid-Cap Equity, Opportunity,
Innovation, Global Innovation, International Growth, Structured
Emerging Markets, Tax-Efficient Structured Emerging Markets and
International Funds may invest in European Depository Receipts
(EDRs) and Global Depository Receipts (GDRs). ADRs are dollar-
denominated receipts issued generally by domestic banks and
representing the deposit with the bank of a security of a foreign
issuer, and are publicly traded on exchanges or over-the-counter
in the United States. EDRs are receipts similar to ADRs and are
issued and traded in Europe. GDRs may be offered privately in the
United States and also traded in public or private markets in
other countries.
Investing in foreign securities involves special risks and
considerations not typically associated with investing in U.S.
securities and shareholders should consider carefully the
substantial risks involved for Funds that invest in these
securities. These risks include: differences in accounting,
auditing and financial reporting standards; generally higher
commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory
taxation; adverse changes in investment or exchange control
regulations; and political instability. Individual foreign
economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate
of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. The securities markets, values
of securities, yields and risks associated with foreign securities
markets may change independently of each other. Also, foreign
securities and 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 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 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
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71
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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, Structured Emerging
Markets, Tax-Efficient Structured Emerging Markets and
International Funds may invest a portion of its assets in
securities of issuers located in Russia and in other Eastern
European countries. While investments in securities of such
issuers are subject generally to the same risks associated with
investments in other emerging market countries described above,
the political, legal and operational risks of investing in Russian
and other Eastern European issuers, and of having assets custodied
within these countries, may be particularly acute. A risk of
particular note with respect to direct investment in Russian
securities is the way in which ownership of shares of companies is
normally recorded. When a Fund invests in a Russian issuer, it
will normally receive a "share extract," but that extract is not
legally determinative of ownership. The official record of
ownership of a company's share is maintained by the company's
share registrar. Such share registrars are completely under the
control of the issuer, and investors are provided with few legal
rights against such registrars.
Foreign A Fund that invests directly in foreign currencies or in
Currencies securities that trade in, and receive revenues in, foreign
currencies will be subject to currency risk. The Global
Innovation, International Growth, 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, significant
uncertainty surrounds the recent introduction of the euro (a
common currency unit for the European Union) in January 1999 and
the effect it may have on the value of securities denominated in
local European currencies. These and other currencies in which the
Funds' assets are denominated may be devalued against the U.S.
dollar, resulting in a loss to the Funds.
Foreign Currency Transactions. The Equity Income, Value,
Renaissance, Growth, Select Growth, Target, Mid-Cap Equity,
Opportunity, Innovation, Global Innovation, International Growth,
Structured Emerging Markets, Tax-Efficient Structured Emerging
Markets and International Funds may enter into forward foreign
currency exchange contracts to reduce the risks of adverse changes
in foreign exchange rates. In addition, the Global Innovation,
International Growth, Structured Emerging Markets, Tax-Efficient
Structured Emerging Markets and International Funds may buy and
sell foreign currency futures contracts and options on foreign
currencies and foreign currency futures. A forward foreign
currency exchange contract, which involves an obligation to
purchase or sell a specific currency at a future date at a price
set at the time of the contract, reduces a Fund's exposure to
changes in the value of the currency it will deliver and increases
its exposure to changes in the value of the currency it will
receive for the duration of the contract. The effect on the value
of a Fund is similar to selling securities denominated in one
currency and purchasing securities denominated in another
currency. Contracts to sell foreign currency would limit any
potential gain which might be realized by a Fund if the value of
the hedged currency increases. A Fund may enter into these
contracts to hedge against foreign exchange risk arising from the
Fund's investment or anticipated investment in securities
denominated in foreign currencies. Suitable hedging transactions
may not be available in all circumstances and there can be
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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, International Growth, Structured Emerging
Markets, Tax-Efficient Structured Emerging Markets and
International Funds may also enter into these contracts for
purposes of increasing exposure to a foreign currency or to shift
exposure to foreign currency fluctuations from one currency to
another. To the extent that it does so, a Fund will be subject to
the additional risk that the relative value of currencies will be
different than anticipated by the Fund's portfolio manager. The
Global Innovation, International Growth, Structured Emerging
Markets, Tax-Efficient Structured Emerging Markets and
International Funds may use one currency (or a basket of
currencies) to hedge against adverse changes in the value of
another currency (or a basket of currencies) when exchange rates
between the two currencies are positively correlated. 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.
Convertible Each Fund may invest in convertible securities. Convertible
Securities securities are generally preferred stocks and other securities,
including fixed income securities and warrants, that are
convertible into or exercisable for common stock at either a
stated price or a stated rate. The price of a convertible security
will normally vary in some proportion to changes in the price of
the underlying common stock because of this conversion or exercise
feature. However, the value of a convertible security may not
increase or decrease as rapidly as the underlying common stock. A
convertible security will normally also provide income and is
subject to interest rate risk. While convertible securities
generally offer lower interest or dividend yields than non-
convertible fixed income securities of similar quality, their
value tends to increase as the market value of the underlying
stock increases and to decrease when the value of the underlying
stock decreases. Also, a Fund may be forced to convert a security
before it would otherwise choose, which may have an adverse effect
on the Fund's ability to achieve its investment objective.
Derivatives Each Fund (except the Mega-Cap, Capital Appreciation, Mid-Cap,
Small-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 succeed.
Examples of derivative instruments include options contracts,
futures contracts, options on futures contracts and swap
agreements. The Equity Income, Value, Renaissance, Growth, Select
Growth, Target, Mid-Cap Equity, Opportunity, Innovation, Global
Innovation, International Growth, Tax-Efficient Equity, Structured
Emerging Markets, Tax-Efficient Structured Emerging Markets and
International Funds may purchase and sell (write) call and put
options on securities, securities indexes and foreign currencies.
Each of these Funds may purchase and sell futures contracts and
options thereon with respect to securities, securities indexes and
foreign currencies. The Enhanced Equity Fund may purchase and
write options on securities indexes and enter into securities
index futures contracts and options on securities index futures
contracts. The International Growth, Tax-Efficient Equity,
Structured Emerging Markets and Tax-Efficient Structured Emerging
Markets may enter into swap agreements with respect to securities
indexes. A description of these and other derivative instruments
that the Funds may use are described under "Investment Objectives
and Policies" in the Statement of Additional Information.
A Fund's use of derivative instruments involves risks different
from, or greater than, the risks associated with investing
directly in securities and other more traditional investments. A
description of various risks
PIMCO Funds: Multi-Manager Series
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associated with particular derivative instruments is included in
"Investment Objectives and Policies" in the Statement of
Additional Information. The following provides a more general
discussion of important risk factors relating to all derivative
instruments that may be used by the Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
Liquidity Risk Liquidity risk exists when a particular derivative
instrument is difficult to purchase or sell. If a derivative
transaction is particularly large or if the relevant market is
illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When a Fund uses derivatives
for leverage, investments in that Fund will tend to be more
volatile, resulting in larger gains or losses in response to
market changes. To limit leverage risk, each Fund will segregate
assets determined to be liquid by PIMCO Advisors or a Sub-Adviser
in accordance with procedures established by the Board of Trustees
(or, as permitted by applicable regulation, enter into certain
offsetting positions) to cover its obligations under derivative
instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that a Fund
will engage in derivatives transactions at any time or from time
to time. A Fund's ability to use derivatives may also be limited
by certain regulatory and tax considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the risk that the market value of the
instrument will change in a way detrimental to a Fund's interest.
If a portfolio manager incorrectly forecasts the values of
securities, currencies or interest rates or other economic factors
in using derivatives for a Fund, the Fund might have been in a
better position if it had not entered into the transaction at all.
While some strategies involving derivative instruments can reduce
the risk of loss, they can also reduce the opportunity for gain or
even result in losses by offsetting favorable price movements in
other Fund investments. A Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to a Fund. Also, the value of
derivatives may not correlate perfectly, or at all, with the value
of the assets, reference rates or indexes they are designed to
closely track. In addition, a Fund's use of derivatives may cause
the Fund to realize higher amounts of short-term capital gains
(taxed at ordinary income tax rates when distributed to
shareholders who are individuals) than if the Fund had not used
such instruments.
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Equity- Each of the Structured Emerging Markets and Tax-Efficient
Linked Structured Emerging Markets Funds may invest up to 15% of its net
Securities assets in equity-linked securities. The International Fund may
invest up to 5% of its assets in equity-linked securities. Equity-
linked securities are privately issued securities whose investment
results are designed to correspond generally to the performance of
a specified stock index or "basket" of stocks, or sometimes a
single stock. To the extent that a Fund invests in equity-linked
securities whose return corresponds to the performance of a
foreign securities index or one or more of foreign stocks,
investing in equity-linked securities will involve risks similar
to the risks of investing in foreign equity securities. See
"Foreign Securities" above. In addition, an investing Fund bears
the risk that the issuer of an equity-linked security may default
on its obligations under the security. Equity-linked securities
may be considered illiquid and thus subject to the Funds'
restrictions on investments in illiquid securities.
Credit The Funds may invest in securities based on their credit ratings
Ratings assigned by rating agencies such as Moody's Investors Service,
and Inc. ("Moody's") and Standard & Poor's Ratings Services ("S&P").
Unrated Moody's, S&P and other rating agencies are private services that
Securities provide ratings of the credit quality of fixed income securities,
including convertible securities. The Appendix to the Statement of
Additional Information describes the various ratings assigned to
fixed income securities by Moody's and S&P. Ratings assigned by a
rating agency are not absolute standards of credit quality and do
not evaluate market risk. Rating agencies may fail to make timely
changes in credit ratings and an issuer's current financial
condition may be better or worse than a rating indicates. A Fund
will not necessarily sell a security when its rating is reduced
below its rating at the time of purchase. PIMCO Advisors and the
Sub-Advisers do not rely solely on credit ratings, and develop
their own analysis of issuer credit quality.
A Fund may purchase unrated securities (which are not rated by a
rating agency) if its portfolio manager determines that the
security is of comparable quality to a rated security that the
Fund may purchase. Unrated securities may be less liquid than
comparable rated securities and involve the risk that the
portfolio manager may not accurately evaluate the security's
comparative credit rating.
Loans of For the purpose of achieving income, each Fund may lend its
Portfolio portfolio securities to brokers, dealers, and other financial
Securities institutions provided a number of conditions are satisfied,
including that the loan is fully collateralized. Please see
"Investment Objectives and Policies" in the Statement of
Additional Information for details. When a Fund lends portfolio
securities, its investment performance will continue to reflect
changes in the value of the securities loaned, and the Fund will
also receive a fee or interest on the collateral. Securities
lending involves the risk of loss of rights in the collateral or
delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. A Fund may pay
lending fees to the party arranging the loan.
Short Each Fund may make short sales as part of its overall portfolio
Sales management strategies or to offset a potential decline in the
value of a security. A short sale involves the sale of a security
that is borrowed from a broker or other institution to complete
the sale. A Fund may only enter into short selling transactions if
the security sold short is held in the Fund's portfolio or if the
Fund has the right to acquire the security without the payment of
further consideration. For these purposes, a Fund may also hold or
have the right to acquire securities which, without the payment of
any further consideration, are convertible into or exchangeable
for the securities sold short. Short sales expose a Fund to the
risk that it will be required to acquire, convert or exchange
securities to replace the borrowed securities (also known as
"covering" the short position) at a time when the securities sold
short have appreciated in value, thus resulting in a loss to the
Fund.
PIMCO Funds: Multi-Manager Series
75
<PAGE>
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
Transactions settlement 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 Each Fund may invest in securities that are illiquid so long as
Securities not more than 15% of the value of the Fund's net assets (taken at
market value at the time of investment) would be invested in such
securities. Certain illiquid securities may require pricing at
fair value as determined in good faith under the supervision of
the Board of Trustees. A portfolio manager may be subject to
significant delays in disposing of illiquid securities held by the
Fund, and transactions in illiquid securities may entail
registration expenses and other transaction costs that are higher
than those for transactions in liquid securities. The term
"illiquid securities" for this purpose means securities that cannot
be disposed of within seven days in the ordinary course of business
at approximately the amount at which a Fund has valued the
securities. Please see "Investment Objectives and Policies" in the
Statement of Additional Information for a listing of various
securities that are generally considered to be illiquid for these
purposes. Restricted securities, i.e., securities subject to legal
or contractual restrictions on resale, may be illiquid. However,
some restricted securities (such as securities issued pursuant to
Rule 144A under the Securities Act of 1933 and certain commercial
paper) may be treated as liquid, although they may be less liquid
than registered securities traded on established secondary markets.
Investment The International Growth and International Funds may invest up to
in Other 10% of their assets in securities of other investment companies,
Investment such as closed-end management investment companies, or in pooled
Companies accounts or other investment vehicles which invest in foreign
markets. Each of the other Funds may invest up to 5% of its assets
in other investment companies. As a shareholder of an investment
company, a Fund may indirectly bear service and other fees which
are in addition to the fees the Fund pays its service providers.
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
Prospectus
76
<PAGE>
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.
Changes The investment objective of each of the Renaissance, Growth,
in Select Growth, Target, Opportunity, Innovation, Global Innovation,
Investment International Growth, Tax-Efficient Equity, Tax-Efficient
Objectives Structured Emerging Markets and International Funds described in
and this Prospectus may be changed by the Board of Trustees without
Policies 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.
New Funds In addition to the risks described under "Summary of Principal
Risks" above and in this section, the Global Innovation Fund is
newly formed and therefore has no history upon which investors can
evaluate its likely performance. Accordingly, there can be no
assurance that the Fund will achieve its investment objective.
Also, it is possible that the Fund may invest in securities
offered in initial public offerings and other similar transactions
which, because of the Fund's size, may have a disproportionate
impact on the Fund's performance results. The Fund would not
necessarily have achieved the same performance results if its
aggregate net assets had been greater.
Percentage Unless otherwise stated, all percentage limitations on Fund
Investment investments listed in this Prospectus will apply at the time of
Limitations investment. A Fund would not violate these limitations unless an
excess or deficiency occurs or exists immediately after and as a
result of an investment.
Other The Funds may invest in other types of securities and use a
Investments variety of investment techniques and strategies which are not
and described in this Prospectus. These securities and techniques may
Techniques subject the Funds to additional risks. Please see the Statement of
Additional Information for additional information about the
securities and investment techniques described in this Prospectus
and about additional securities and techniques that may be used by
the Funds.
77
PIMCO 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. Except as
provided in the next sentence, 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 information for the Select Growth and
Target Funds for the period ended December 31, 1999 is included in
the Trust's semi-annual report to shareholders, and is unaudited.
The annual report and semi-annual report are incorporated by
reference in the Statement of Additional Information and are
available free of charge upon request from the Distributor.
The Global Innovation and Mega-Cap Funds did not offer
Institutional or Administrative Class shares during the periods
ended June 30, 1999.
<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
06/30/99 $16.09 $ 0.44 (a) $ 1.28 (a) $ 1.72 $(0.43) $ 0.00 $(1.76)
06/30/98 15.41 0.44 (a) 2.75 (a) 3.19 (0.42) 0.00 (2.09)
06/30/97 14.36 0.40 3.17 3.57 (0.55) 0.00 (1.97)
11/01/95-06/30/96 13.09 0.78 1.31 2.09 (0.34) 0.00 (0.48)
10/31/95 11.75 0.46 1.67 2.13 (0.46) 0.00 (0.33)
10/31/94 11.95 0.42 (0.16) 0.26 (0.42) 0.00 (0.04)
Administrative Class
06/30/99 16.08 0.41 (a) 1.28 (a) 1.69 (0.40) 0.00 (1.76)
06/30/98 15.40 0.40 (a) 2.75 (a) 3.15 (0.38) 0.00 (2.09)
06/30/97 14.35 0.27 3.26 3.53 (0.51) 0.00 (1.97)
11/01/95-06/30/96 13.13 0.75 1.31 2.06 (0.36) 0.00 (0.48)
11/30/94-10/31/95 11.12 0.39 2.35 2.74 (0.40) 0.00 (0.33)
Value Fund (i)
Institutional Class
06/30/99 $15.66 $ 0.28 (a) $ 1.36 (a) $ 1.64 $(0.28) $ 0.00 $(1.72)
06/30/98 14.81 0.25 (a) 2.47 (a) 2.72 (0.24) 0.00 (1.63)
06/30/97 12.46 1.05 2.11 3.16 (0.31) 0.00 (0.50)
11/01/95-06/30/96 12.53 0.25 1.62 1.87 (0.17) 0.00 (1.77)
10/31/95 11.55 0.30 2.18 2.48 (0.30) 0.00 (1.20)
10/31/94 11.92 0.30 (0.28) 0.02 (0.29) 0.00 (0.10)
Administrative Class
06/30/99 15.65 0.26 (a) 1.32 (a) 1.58 (0.25) 0.00 (1.72)
08/21/97-06/30/98 15.66 0.19 (a) 1.65 (a) 1.84 (0.22) 0.00 (1.63)
Renaissance Fund (ii)
Institutional Class
06/30/99 19.07 0.06 (a) 1.43 (a) 1.49 0.00 0.00 (2.33)
12/30/97-06/30/98 16.73 0.05 2.29 2.34 0.00 0.00 0.00
Administrative Class
08/31/98-06/30/99 15.37 0.02 (a) 5.12 (a) 5.14 0.00 0.00 (2.33)
Growth Fund (ii)
Institutional Class
03/31/99-06/30/99 $31.27 $(0.01)(a) $(0.02)(a) $(0.03) $ 0.00 $ 0.00 $ 0.00
Administrative Class
03/31/99-06/30/99 31.27 (0.04)(a) 0.00 (a) (0.04) 0.00 0.00 0.00
Select Growth Fund
(ii)(iii)
Institutional Class
12/31/99+ $24.86 $ 0.08 (a) $ 1.92 (a) $ 2.00 $(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)
12/28/94-10/31/95 10.00 0.07 2.71 2.78 (0.06) 0.00 0.00
</TABLE>
- -------
* Annualized
+ Unaudited
(a) Per share amounts based on average number of shares outstanding during the
period.
(i) The information provided for the Equity Income and Value Funds reflects
the results of operations under NFJ Investment Group ("NFJ") as the Funds'
Sub-Adviser. NFJ is expected to be replaced by the PIMCO Equity Advisors
division of PIMCO Advisors ("PIMCO Equity Advisors") as the Sub-Adviser to
the Funds on or about May 8, 2000. The Funds would not necessarily have
achieved the results shown had PIMCO Equity Advisors been the Funds' Sub-
Adviser during the periods shown.
(ii) The information provided for the Renaissance, Growth and Select Growth
Funds reflects results of operations under the Funds' former Sub-Adviser
through May 7, March 6, and June 30, respectively; the Funds would not
necessarily have achieved the performance results shown above under their
current investment management arrangements.
(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.
Prospectus
79
<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 $ (2.19) $ 0.00 $15.62 12.56 % $123,012 0.71% 3.00%
0.00 0.00 (2.51) 0.00 16.09 21.84 138,650 0.71 2.71
0.00 0.00 (2.52) 0.00 15.41 27.67 121,138 0.72 3.03
0.00 0.00 (0.82) 0.00 14.36 16.35 116,714 0.70* 3.41 *
0.00 0.00 (0.79) 0.00 13.09 19.36 118,015 0.70 3.83
0.00 0.00 (0.46) 0.00 11.75 2.25 92,365 0.70 3.77
0.00 0.00 (2.16) 0.00 15.61 12.31 13,797 0.96 2.80
0.00 0.00 (2.47) 0.00 16.08 21.58 11,699 0.96 2.45
0.00 0.00 (2.48) 0.00 15.40 27.40 8,145 0.97 2.79
0.00 0.00 (0.84) 0.00 14.35 16.08 6,097 0.95* 3.19 *
0.00 0.00 (0.73) 0.00 13.13 25.69 140 0.95* 3.43 *
$0.00 $0.00 $ (2.00) $ 0.00 $15.30 12.30 % $ 69,181 0.71% 1.99%
0.00 0.00 (1.87) 0.00 15.66 19.35 83,219 0.71 1.59
0.00 0.00 (0.81) 0.00 14.81 26.38 74,613 0.73 2.02
0.00 0.00 (1.94) 0.00 12.46 16.24 52,727 0.70* 2.40*
0.00 0.00 (1.50) 0.00 12.53 24.98 14,443 0.70 2.50
0.00 0.00 (0.39) 0.00 11.55 0.15 15,442 0.70 2.34
0.00 0.00 (1.97) 0.00 15.26 11.91 23,164 0.95 1.81
0.00 0.00 (1.85) 0.00 15.65 12.71 10,349 0.96* 1.40*
$0.00 $0.00 $ (2.33) $ 0.00 $18.23 10.24% $ 136 0.86% 0.38%
0.00 0.00 0.00 0.00 19.07 13.99 851 0.86* 0.55*
0.00 0.00 (2.33) 0.00 18.18 36.41 427 1.09* 0.13*
$0.00 $0.00 $ 0.00 $ 0.00 $31.24 (0.10)% $ 948 0.74%* (0.19)%*
0.00 0.00 0.00 0.00 31.23 (0.13) 6,164 0.97* (0.53)*
$0.00 $0.00 $ (3.74) $ 0.00 $23.12 8.87% $ 1,498 0.98%(b)* 0.29%*
0.00 0.00 (0.73) 0.00 24.86 26.34 1,184 1.01(b) (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 0.00 (0.06) 0.00 12.72 27.86 7,791 0.82* 0.79*
<CAPTION>
Distributions
in Excess of
Net Realized Portfolio
Capital Gains Turnover Rate
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
$0.00 76%
0.00 45
0.00 45
0.00 52
0.00 46
0.00 36
0.00 76
0.00 45
0.00 45
0.00 52
0.00 43
$0.00 101%
0.00 77
0.00 71
0.00 29
0.00 71
0.00 44
0.00 101
0.00 77
$0.00 221%
0.00 192
0.00 221
$0.00 131%
0.00 131
$0.00 142%
0.00 95
0.00 120
0.00 139
0.00 73
0.00 123
</TABLE>
(b) Ratio of expenses to average net assets excluding interest expense is
0.82%.
PIMCO Funds: Multi-Manager Series
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
(cont.)
Administrative Class
12/31/99+ $24.67 $ 0.00 (a) $ 1.89 (a) $1.89 $ (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)
05/31/95-10/31/95 11.45 0.02 1.28 1.30 (0.02) 0.00 0.00
Target Fund (iv)
Institutional Class
12/31/99+ $17.74 $(0.06)(a) $ 8.88 (a) $8.82 $ 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
12/31/99+ 17.73 (0.08)(a) 8.89 (a) 8.81 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
Mid-Cap Equity Fund (iv)
Institutional Class
06/30/99 $13.53 $(0.03)(a) $ 2.99 (a) $2.96 $ 0.00 $0.00 $(0.65)
06/30/98 14.04 (0.03)(a) 3.61 (a) 3.58 0.00 0.00 (4.09)
06/30/97 14.66 (0.06)(a) 1.31 (a) 1.25 0.00 0.00 (1.87)
11/01/95-06/30/96 12.92 0.49 1.62 2.11 0.00 0.00 (0.37)
12/28/94-10/31/95 10.00 0.02 2.92 2.94 (0.02) 0.00 0.00
Administrative Class
07/01/98-05/27/99(b) 13.50 (0.05)(a) 1.71 (a) 1.66 0.00 0.00 (0.65)
08/21/97-06/30/98 15.27 (0.05)(a) 2.37 (a) 2.32 0.00 0.00 (4.09)
Opportunity Fund (iv)
Institutional Class
03/31/99-06/30/99 $21.40 $(0.03)(a) $ 2.89 (a) $2.86 $ 0.00 $0.00 $ 0.00
Administrative Class
03/31/99-06/30/99 21.40 (0.05)(a) 2.91 (a) 2.86 0.00 0.00 0.00
Innovation Fund (iv)
Institutional Class
03/05/99-06/30/99 $32.73 $(0.05)(a) $ 4.82 (a) $4.77 $ 0.00 $0.00 $ 0.00
International Growth
Fund (iv)
Institutional Class
06/30/99 $13.55 $(0.02)(a) $ 3.56 (a) $3.54 $ (0.02) $0.00 $(1.03)
12/31/97-06/30/98 10.00 0.00 (a) 3.55 (a) 3.55 0.00 0.00 0.00
Capital Appreciation
Fund
Institutional Class
06/30/99 $26.13 $ 0.16 (a) $ 2.35 (a) $2.51 $ (0.15) $0.00 $(1.65)
06/30/98 21.19 0.15 (a) 6.59 (a) 6.74 (0.12) 0.00 (1.68)
06/30/97 18.10 0.24 5.08 5.32 (0.10) 0.00 (2.13)
11/01/95-06/30/96 16.94 0.35 1.99 2.34 (0.15) 0.00 (1.03)
10/31/95 13.34 0.18 3.60 3.78 (0.18) 0.00 0.00
10/31/94 13.50 0.14 (0.12) 0.02 (0.14) 0.00 (0.04)
Administrative Class
06/30/99 25.99 0.09 (a) 2.34 (a) 2.43 (0.13) 0.00 (1.65)
06/30/98 21.16 0.10 (a) 6.55 (a) 6.65 (0.14) 0.00 (1.68)
07/31/96-06/30/97 17.19 0.16 6.03 6.19 (0.09) 0.00 (2.13)
Mid-Cap Fund (v)
Institutional Class
06/30/99 $24.09 $ 0.12 (a) $(0.11)(a) $0.01 $ (0.02) $0.00 $(1.07)
06/30/98 20.28 0.11 (a) 5.11 (a) 5.22 (0.07) (0.01) (1.33)
06/30/97 19.44 (0.07) 5.25 5.18 (0.05) 0.00 (4.29)
11/01/95-06/30/96 18.16 0.32 1.53 1.85 (0.14) 0.00 (0.43)
10/31/95 13.97 0.07 4.19 4.26 (0.07) 0.00 0.00
10/31/94 13.97 0.06 0.01 0.07 (0.06) 0.00 (0.01)
Administrative Class
06/30/99 23.96 0.06 (a) (0.06)(a) 0.00 (0.01) 0.00 (1.07)
06/30/98 20.24 0.05 (a) 5.08 (a) 5.13 (0.07) (0.01) (1.33)
06/30/97 19.44 (0.13) 5.25 5.12 (0.03) 0.00 (4.29)
11/01/95-06/30/96 18.17 0.28 1.53 1.81 (0.11) 0.00 (0.43)
11/30/94-10/31/95 13.31 0.03 4.85 4.88 (0.02) 0.00 0.00
</TABLE>
- -------
* Annualized
+ Unaudited
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) All Administrative Class shares of the Mid-Cap Equity Fund were redeemed
on May 27, 1999.
(iv) The information provided for the Target, Mid-Cap Equity, Opportunity,
Innovation and International Growth Funds reflects results of operations
under the Funds' former Sub-Adviser through March 6, June 30, March 6,
March 6 and June 30, respectively; the Funds would not necessarily have
achieved the performance results shown above under their current
investment management arrangements.
(v) The Mid-Cap Fund was formerly the Mid-Cap Growth Fund.
Prospectus
81
<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 $ (3.75) $ 0.00 $ 22.81 8.50% $ 42 1.23%(c)* 0.06%*
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 (0.02) 0.00 12.73 11.34 24,645 1.06* 0.34 *
$ 0.00 $ 0.00 $ (1.80) $ 0.00 $ 24.76 51.15% $ 4,654 0.80%* (0.58)%*
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 24.74 51.12 8,307 1.05* (0.81)*
0.00 0.00 0.00 0.00 17.73 8.51 5,513 1.02* (0.61)*
$ 0.00 $ 0.00 $ (0.65) $ 0.00 $15.84 23.18% $ 7,399 0.89% (0.22)%
0.00 0.00 (4.09) 0.00 13.53 30.40 8,488 0.89 (0.25)
0.00 0.00 (1.87) 0.00 14.04 9.61 7,591 1.15 (0.43)
0.00 0.00 (0.37) 0.00 14.66 16.72 8,378 0.88* (0.32)*
0.00 0.00 (0.02) 0.00 12.92 29.34 8,357 0.88* 0.24*
0.00 0.00 (0.65) 0.00 14.51 13.12 0 1.14* (0.45)*
0.00 0.00 (4.09) 0.00 13.50 19.65 2,371 1.13* (0.49)*
$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 24.26 13.36% $ 417 0.88%* (0.54)%*
0.00 0.00 0.00 0.00 24.26 13.36 2,010 1.12* (0.82)*
$ 0.00 $ 0.00 $ 0.00 $ 0.00 $ 37.50 14.57% $ 444 0.88%* (0.15)%*
$ 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 $ (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 (0.18) 0.00 16.94 28.47 236,220 0.70 1.22
0.00 0.00 (0.18) 0.00 13.34 0.15 165,441 0.70 1.17
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 $ (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 18.16 30.54 189,320 0.70 0.43
0.00 0.00 (0.07) 0.00 13.97 0.58 121,791 0.70 0.45
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 (0.02) 0.00 18.17 36.64 892 0.94* 0.23*
<CAPTION>
Distributions
in Excess of
Net Realized Portfolio
Capital Gains Turnover Rate
- ---------------------------------------------------------------------------------------------------------------------
<S> <C>
$ 0.00 142%
0.00 95
0.00 120
0.00 139
0.00 73
0.00 58
$ 0.00 59%
0.00 229
0.00 59
0.00 229
$ 0.00 273%
0.00 268
0.00 202
0.00 97
0.00 132
0.00 273
0.00 268
$ 0.00 175%
0.00 175
$ 0.00 119%
$ 0.00 269%
0.00 60
$ 0.00 120%
0.00 75
0.00 87
0.00 73
0.00 83
0.00 77
0.00 120
0.00 75
0.00 87
$ 0.00 85%
0.00 66
0.00 82
0.00 79
0.00 78
0.00 61
0.00 85
0.00 66
0.00 82
0.00 79
0.00 72
</TABLE>
- -------
(c) Ratio of expenses to average net assets excluding interest expense is
1.07%.
PIMCO Funds: Multi-Manager Series
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>
Small-Cap Fund (vi)
Institutional Class
06/30/99 $14.01 $(0.01)(a) $ (2.12)(a) $(2.13) $ 0.00 $0.00 $ 0.00
06/30/98 13.40 (0.03)(a) 2.52 (a) 2.49 0.00 0.00 (1.88)
06/30/97 20.83 (0.01)(a) 3.17 (a) 3.16 0.00 0.00 (10.59)
11/01/95-06/30/96 21.02 2.02 (0.61) 1.41 0.00 0.00 (1.60)
10/31/95 19.38 (0.05) 3.12 3.07 0.00 0.00 (1.43)
10/31/94 19.15 (0.02) 0.89 0.87 0.00 0.00 (0.64)
Administrative Class
06/30/99 13.97 (0.04)(a) (2.12)(a) (2.16) 0.00 0.00 0.00
06/30/98 13.41 (0.07)(a) 2.51 (a) 2.44 0.00 0.00 (1.88)
06/30/97 20.82 (0.06)(a) 3.24 (a) 3.18 0.00 0.00 (10.59)
11/01/95-06/30/96 21.01 2.02 (a) (0.61)(a) 1.41 0.00 0.00 (1.60)
09/27/95-10/31/95 21.90 (0.02) (0.87) (0.89) 0.00 0.00 0.00
Micro-Cap Fund (vi)
Institutional Class
06/30/99 $23.66 $(0.14)(a) $(2.89 )(a) $(3.03) $ 0.00 $0.00 $ 0.00
06/30/98 19.85 (0.11)(a) 6.54 (a) 6.43 0.00 0.00 (2.62)
06/30/97 18.47 0.00 3.41 3.41 0.00 0.00 (2.03)
11/01/95-06/30/96 15.38 0.00 3.43 3.43 0.00 0.00 (0.34)
10/31/95 11.87 (0.04) 3.55 3.51 0.00 0.00 0.00
10/31/94 11.06 (0.03) 0.84 0.81 0.00 0.00 0.00
Administrative Class
06/30/99 23.52 (0.19)(a) (2.88)(a) (3.07) 0.00 0.00 0.00
06/30/98 19.78 (0.17)(a) 6.53 (a) 6.36 0.00 0.00 (2.62)
06/30/97 18.46 (0.06) 3.41 3.35 0.00 0.00 (2.03)
04/01/96-06/30/96 16.73 0.03 1.70 1.73 0.00 0.00 0.00
Small-Cap Value Fund
Institutional Class
06/30/99 $17.68 $0.32 (a) $(1.29)(a) $(0.97) $(0.21) $0.00 $ 0.00
06/30/98 15.78 0.29 (a) 2.50 (a) 2.79 (0.13) 0.00 (0.76)
06/30/97 14.20 0.46 3.63 4.09 (0.13) 0.00 (2.38)
11/01/95-06/30/96 13.10 0.56 1.49 2.05 (0.21) 0.00 (0.74)
10/31/95 12.07 0.28 1.92 2.20 (0.28) 0.00 (0.89)
10/31/94 12.81 0.29 (0.65) (0.36) (0.29) 0.00 (0.09)
Administrative Class
06/30/99 17.63 0.29 (a) (1.30)(a) (1.01) (0.20) 0.00 0.00
06/30/98 15.76 0.25 (a) 2.49 (a) 2.74 (0.11) 0.00 (0.76)
06/30/97 14.20 0.38 3.68 4.06 (0.12) 0.00 (2.38)
11/01/95-06/30/96 13.16 0.54 1.43 1.97 (0.19) 0.00 (0.74)
Enhanced Equity Fund
Institutional Class
06/30/99 $12.64 $ 0.08 (a) $ 1.91 (a) $ 1.99 $(0.06) $0.00 $ (1.61)
06/30/98 16.46 0.11 (a) 3.91 (a) 4.02 (0.11) 0.00 (7.73)
06/30/97 15.91 1.18 3.10 4.28 (0.10) 0.00 (3.63)
11/01/95-06/30/96 14.44 0.34 1.67 2.01 (0.16) 0.00 (0.38)
10/31/95 11.99 0.25 2.62 2.87 (0.25) 0.00 (0.17)
10/31/94 12.08 0.25 (0.04) 0.21 (0.25) 0.00 (0.05)
Administrative Class
06/30/99 12.59 0.05 (a) 1.90 (a) 1.95 (0.06) 0.00 (1.61)
08/21/97-06/30/98 17.53 0.05 (a) 2.85 (a) 2.90 (0.11) 0.00 (7.73)
Tax-Efficient Equity
Fund
Administrative Class
09/30/98-06/30/99 $ 8.65 $0.03 (a) $ 2.93 (a) $ 2.96 $ 0.00 $0.00 $ 0.00
Structured Emerging
Markets Fund
Institutional Class
09/30/98-06/30/99 $10.00 $0.15 (a) $ 2.57 (a) $ 2.72 $(0.07) $0.00 $ (0.28)
Tax-Efficient Structured
Emerging Markets Fund
Institutional Class
09/30/98-06/30/99 $10.00 $0.16 (a) $ 3.10 (a) $ 3.26 $(0.06) $0.00 $ 0.00
International Fund
Institutional Class
09/30/98-12/31/98 $10.47 $ 0.14 (a) $ 2.16 (a) $ 2.30 $ 0.00 $0.00 $ (1.15)
Administrative Class
09/30/98-12/31/98 10.47 0.09 (a) 2.15 (a) 2.24 0.00 0.00 (1.15)
</TABLE>
- -------
* Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(vi) The Small-Cap Fund and Micro-Cap Fund were formerly the Small-Cap Growth
Fund and the Micro-Cap Growth Fund, respectively.
Prospectus
83
<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>
$(0.47) $0.00 $ (0.47) $ 0.00 $11.41 (14.99)% $ 66,393 1.25% (0.09)% 94%
0.00 0.00 (1.88) 0.00 14.01 19.33 47,641 1.26 (0.20) 77
0.00 0.00 (10.59) 0.00 13.40 22.82 33,390 1.32 (0.05) 129
0.00 0.00 (1.60) 0.00 20.83 7.22 32,954 1.25* (0.20)* 59
0.00 0.00 (1.43) 0.00 21.02 17.39 73,977 1.25 (0.27) 86
0.00 0.00 (0.64) 0.00 19.38 4.62 50,425 1.25 (0.33) 66
(0.47) 0.00 (0.47) 0.00 11.34 (15.26) 2,229 1.50 (0.33) 94
0.00 0.00 (1.88) 0.00 13.97 18.90 981 1.49 (0.51) 77
0.00 0.00 (10.59) 0.00 13.41 23.12 1 1.54 (0.36) 129
0.00 0.00 (1.60) 0.00 20.82 7.18 112 1.50* (0.41)* 59
0.00 0.00 0.00 0.00 21.01 (5.34) 544 1.60* (0.82)* 9
$(0.63) $0.00 $ (0.63) $ 0.00 $20.00 (12.66)% $234,439 1.50% (0.71)% 73%
0.00 0.00 (2.62) 0.00 23.66 33.95 257,842 1.51 (0.50) 72
0.00 0.00 (2.03) 0.00 19.85 20.05 164,139 1.52 (0.49) 84
0.00 0.00 (0.34) 0.00 18.47 22.64 83,973 1.50* (0.45)* 54
0.00 0.00 0.00 0.00 15.38 29.54 69,775 1.50 (0.37) 87
0.00 0.00 0.00 0.00 11.87 7.31 32,605 1.50 (0.25) 59
(0.63) 0.00 (0.63) 0.00 19.82 (12.91) 3,000 1.75 (0.97) 73
0.00 0.00 (2.62) 0.00 23.52 33.70 4,779 1.76 (0.74) 72
0.00 0.00 (2.03) 0.00 19.78 19.72 2,116 1.77 (0.74) 84
0.00 0.00 0.00 0.00 18.46 10.34 566 1.73* (0.74)* 54
$(0.45) $0.00 $ (0.66) $ 0.00 $16.05 (5.11)% $ 59,132 0.85% 2.12% 60%
0.00 0.00 (0.89) 0.00 17.68 17.77 47,432 0.85 1.65 41
0.00 0.00 (2.51) 0.00 15.78 31.99 34,639 0.90 1.92 48
0.00 0.00 (0.95) 0.00 14.20 16.35 29,017 0.85* 2.12* 35
0.00 0.00 (1.17) 0.00 13.10 19.88 35,093 0.85 2.25 50
0.00 0.00 (0.38) 0.00 12.07 (2.89) 31,236 0.85 2.23 48
(0.45) 0.00 (0.65) 0.00 15.97 (5.40) 21,002 1.10 1.92 60
0.00 0.00 (0.87) 0.00 17.63 17.41 10,751 1.10 1.39 41
0.00 0.00 (2.50) 0.00 15.76 31.70 5,916 1.16 1.68 48
0.00 0.00 (0.93) 0.00 14.20 15.64 4,433 1.10* 1.86* 35
$ 0.00 $0.00 $ (1.67) $ 0.00 $12.96 17.95 % $ 42,619 0.71% 0.66% 34%
0.00 0.00 (7.84) 0.00 12.64 32.33 36,584 0.71 0.63 65
0.00 0.00 (3.73) 0.00 16.46 31.45 44,838 0.74 1.31 91
0.00 0.00 (0.54) 0.00 15.91 14.21 83,425 0.70* 1.58* 53
0.00 0.00 (0.42) 0.00 14.44 24.46 73,999 0.70 1.91 21
0.00 0.00 (0.30) 0.00 11.99 1.83 65,915 0.70 2.20 44
0.00 0.00 (1.67) 0.00 12.87 17.63 24,015 0.96 0.41 34
0.00 0.00 (7.84) 0.00 12.59 23.85 10,409 0.95* 0.47* 65
$ 0.00 $0.00 $ 0.00 $ 0.00 $11.61 34.28 % $ 3,391 0.92%* 0.31%* 13%
$ 0.00 $0.00 $ (0.35) $ 0.05 $12.42 29.21 % $ 46,577 0.95% 1.56% 30%
$ 0.00 $0.00 $ (0.06) $ 0.05 $13.25 33.39 % $ 72,509 0.95% 1.57% 28%
$ 0.00 $0.00 $ (1.15) $ 0.00 $11.62 23.07 % $ 3,627 1.09%* 1.70%* 55%
0.00 0.00 (1.15) 0.00 11.56 22.47 15,797 1.34* 1.06* 55
</TABLE>
PIMCO Funds: Multi-Manager Series
84
<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 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.
PIMCO
FUNDS
PIMCO Funds
Multi-Manager Series
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
File No. 811-6161
<PAGE>
PIMCO FUNDS: MULTI-MANAGER SERIES
Supplement Dated April 3, 2000
to the
Prospectus for Class D Shares
Dated April 3, 2000
Disclosure Relating to PIMCO Value Fund
Changes in Sub-Advisory Arrangements. On or about May 8, 2000, the PIMCO
Equity Advisors division of PIMCO Advisors L.P. ("PIMCO Equity Advisors") will
assume full portfolio management responsibility for the PIMCO Value Fund under
the terms of the Trust's investment advisory agreement with PIMCO Advisors.
Until such time when PIMCO Equity Advisors assumes full portfolio management
responsibility for the Fund (the "Transition Date"), NFJ Investment Group
("NFJ"), the Fund's current Sub-Adviser, will continue to provide portfolio
management services under the terms of its Portfolio Management Agreement with
PIMCO Advisors. 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 December 31, 1999
of approximately $2.1 billion. NFJ is located at 2121 San Jacinto, Suite 1840,
Dallas, Texas 75201.
Until the Transition Date, Chris Najork, Benno J. Fischer and Paul A.
Magnuson will share primary responsibility for the day-to-day management of
the Fund. Messrs. Najork and Fischer have provided such services to the Fund
since its inception in 1991. Mr. Magnuson has provided such services to the
Fund since 1995. Mr. Najork is a Managing Director and founding partner of
NFJ. 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.
Mr. Fischer is a Managing Director and founding partner of NFJ. 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. Mr.
Magnuson is a Principal at NFJ, where he is also a Portfolio Manager and
Senior Research Analyst. Prior to joining NFJ in 1992, he was an Assistant
Vice President at NationsBank, which he joined in 1985.
Changes to Principal Investments and Strategies. Until the Transition Date,
the description of the Fund under "Principal Investments and Strategies" in
the Fund's Fund Summary is amended to read in its entirety as follows:
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.
<PAGE>
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.
In addition, in connection with the above changes, until the Transition Date
the disclosure under "Principal Risks" in the Fund Summary is revised to
indicate that the following are among the principal risks of investing in the
Fund: Market Risk, Issuer Risk, Value Securities Risk, Credit Risk and
Management Risk.
Disclosure Relating to PIMCO Equity Income Fund
Changes in Sub-Advisory Arrangements. On or about May 8, 2000, the PIMCO
Equity Advisors division of PIMCO Advisors L.P. ("PIMCO Equity Advisors") will
assume full portfolio management responsibility for the PIMCO Equity Income
Fund under the terms of the Trust's investment advisory agreement with PIMCO
Advisors. Until such time when PIMCO Equity Advisors assumes full portfolio
management responsibility for the Fund (the "Transition Date"), NFJ Investment
Group ("NFJ"), the Fund's current Sub-Adviser, will continue to provide
portfolio management services under the terms of its Portfolio Management
Agreement with PIMCO Advisors. Until the Transition Date, Chris Najork and
Benno J. Fischer will share primary responsibility for the day-to-day
management of the Fund. Information about NFJ and Messrs. Najork and Fischer
is provided above under "Disclosure Relating to PIMCO Value Fund--Changes in
Sub-Advisory Arrangements."
Changes to Principal Investments and Strategies. Until the Transition Date,
the description of the Fund under "Principal Investments and Strategies" in
the Fund's Fund Summary is amended to read in its entirety as follows:
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 consistent with the Fund's
investment objective and principal strategies.
In addition, in connection with the above changes, until the Transition Date
the disclosure under "Principal Risks" in the Fund Summary is revised to
indicate that the following are among the principal risks of investing in the
Fund: Market Risk, Issuer Risk, Value Securities Risk, Credit Risk and
Management Risk.
2
<PAGE>
PIMCO FUNDS: MULTI-MANAGER SERIES
Supplement Dated April 3, 2000
to the
Prospectus for Institutional and Administrative Class Shares
Dated April 3, 2000
Disclosure Relating to PIMCO Value Fund
Changes in Sub-Advisory Arrangements. On or about May 8, 2000, the PIMCO
Equity Advisors division of PIMCO Advisors L.P. ("PIMCO Equity Advisors") will
assume full portfolio management responsibility for the PIMCO Value Fund under
the terms of the Trust's investment advisory agreement with PIMCO Advisors.
Until such time when PIMCO Equity Advisors assumes full portfolio management
responsibility for the Fund (the "Transition Date"), NFJ Investment Group
("NFJ"), the Fund's current Sub-Adviser, will continue to provide portfolio
management services under the terms of its Portfolio Management Agreement with
PIMCO Advisors. Information about NFJ is provided in the Prospectus under the
caption "Management of the Funds."
Until the Transition Date, Chris Najork, Benno J. Fischer and Paul A.
Magnuson will share primary responsibility for the day-to-day management of
the Fund. Messrs. Najork and Fischer have provided portfolio management
services to the Fund since its inception in December 1991. Mr. Magnuson has
provided portfolio management services to the Fund since July, 1995.
Information about Messrs. Najork, Fischer and Magnuson is provided in the
Prospectus under the caption "Management of the Funds--NFJ."
Changes to Principal Investments and Strategies. Until the Transition Date,
the description of the Fund under "Principal Investments and Strategies" in
the Fund's Fund Summary is amended to read in its entirety as follows:
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.
In addition, in connection with the above changes, until the Transition Date
the disclosure under "Principal Risks" in the Fund Summary is revised to
indicate that the following are among the principal risks of investing in the
Fund: Market Risk, Issuer Risk, Value Securities Risk, Credit Risk and
Management Risk.
<PAGE>
Disclosure Relating to PIMCO Equity Income Fund
Changes in Sub-Advisory Arrangements. On or about May 8, 2000, the PIMCO
Equity Advisors division of PIMCO Advisors L.P. ("PIMCO Equity Advisors") will
assume full portfolio management responsibility for the PIMCO Equity Income
Fund under the terms of the Trust's investment advisory agreement with PIMCO
Advisors. Until such time when PIMCO Equity Advisors assumes full portfolio
management responsibility for the Fund (the "Transition Date"), NFJ Investment
Group ("NFJ"), the Fund's current Sub-Adviser, will continue to provide
portfolio management services under the terms of its Portfolio Management
Agreement with PIMCO Advisors. Information about NFJ is provided in the
Prospectus under the caption "Management of the Funds."
Until the Transition Date, Chris Najork and Benno J. Fischer will share
primary responsibility for the day-to-day management of the Fund. Messrs.
Najork and Fischer have provided portfolio management services to the Fund
since its inception in March 1991. Information about Messrs. Najork and
Fischer is provided in the Prospectus under the caption "Management of the
Funds--NFJ."
Changes to Principal Investments and Strategies. Until the Transition Date,
the description of the Fund under "Principal Investments and Strategies" in
the Fund's Fund Summary is amended to read in its entirety as follows:
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 consistent with the Fund's
investment objective and principal strategies.
In addition, in connection with the above changes, until the Transition Date
the disclosure under "Principal Risks" in the Fund Summary is revised to
indicate that the following are among the principal risks of investing in the
Fund: Market Risk, Issuer Risk, Value Securities Risk, Credit Risk and
Management Risk.
2
