<PAGE>
PIMCO FUNDS PROSPECTUS
---------------------------------------------------------------
PIMCO Funds NFJ INVESTMENT GROUP NFJ Value 25 Fund
Multi-Manager NFJ Equity Income Fund
Series NFJ Value Fund
April 12, 2000
Share Classes
. Institutional
. Administrative
This cover is not part of the Prospectus [PIMCO LOGO APPEARS HERE]
<PAGE>
Prospectus
PIMCO This Prospectus describes three mutual funds offered by PIMCO
Funds: Funds: Multi-Manager Series. The Funds provide access to the
Multi- professional investment advisory services offered by PIMCO
Manager Advisors L.P. and its affiliate, NFJ Investment Group.
Series
April 12, 2000 This Prospectus explains what you should know about the Funds
before you invest. Please read it carefully.
Share The Securities and Exchange Commission has not approved or
Classes disapproved these securities or determined if this Prospectus
Institutional is truthful or complete. Any representation to the contrary is
and a criminal offense.
Administrative
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Fund Summaries
NFJ Equity Income Fund......................................... 5
NFJ Value Fund................................................. 7
NFJ Value 25 Fund.............................................. 9
Summary of Principal Risks....................................... 11
Management of the Funds.......................................... 13
Investment Options -- Institutional Class and Administrative
Class Shares.................................................... 15
Purchases, Redemptions and Exchanges............................. 16
How Fund Shares Are Priced....................................... 20
Fund Distributions............................................... 21
Tax Consequences................................................. 21
Characteristics and Risks of Securities and Investment
Techniques...................................................... 22
Financial Highlights............................................. 26
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The table below lists the investment objectives and certain investment
characteristics of the Funds. Other important characteristics are described
in the individual Fund Summaries beginning on page 5.
<TABLE>
<CAPTION>
Approximate
Number of
Sub-Adviser Fund Investment Objective Main Investments Holdings
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
NFJ Investment NFJ Equity Current income as a Income producing common stocks of 40-50
Group Income primary objective; companies with market capitalizations
long-term growth of of more than $2 billion
capital as a secondary
objective
----------------------------------------------------------------------------------------------
NFJ Value Long-term growth of Common stocks of companies with market 40
capital and income capitalizations of more than $2
billion that are undervalued relative
to the market and their industry
groups
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NFJ Value 25 Long-term growth of Approximately 25 common stocks of 25
capital and income companies with market capitalizations
of between $1 billion and $5 billion
and below-average price-to-earnings
ratios relative to their industry
groups
----------------------------------------------------------------------------------------------------------
</TABLE>
Fund The following Fund Summaries identify each Fund's investment
Descriptions, objective, principal investments and strategies, principal risks,
Performance performance information and fees and expenses. A more detailed
and Fees "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.
3 PIMCO Funds: Multi-Manager Series
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Prospectus 4
<PAGE>
NFJ Equity Income Fund
- -------------------------------------------------------------------------------
Principal Investment ObjectiveFund Focus Approximate
Investments Seeks current Income producing Capitalization
and income as a common stocks Range
Strategies primary with potential More than $2
objective, and for capital billion
long-term growth appreciation
of capital as a
secondary Approximate Dividend
objective Number of Frequency
Holdings Quarterly
40-50
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in income-producing (e.g.,
dividend-paying) common stocks of companies with market
capitalizations of more than $2 billion at the time of investment.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. From this group of stocks, the Fund
buys approximately 25 stocks with the highest dividend yields. The
portfolio managers then screen the most undervalued companies in
each industry by dividend yield to identify the highest yielding
stocks in each industry. From this group, the Fund buys
approximately 25 additional stocks with the lowest P/E ratios.
In selecting stocks, the portfolio managers consider quantitative
factors such as price momentum (based on changes in stock price
relative to changes in overall market prices), earnings momentum
(based on analysts' earnings per share estimates and revisions to
those estimates), relative dividend yields, valuation relative to
the overall market and trading liquidity. The portfolio managers
may replace a stock when a stock within the same industry group
has a considerably higher dividend yield or lower valuation than
the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
- -------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Value Securities Risk . Management Risk
. Issuer Risk . Credit Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- -------------------------------------------------------------------------------
Performance The Fund does not yet have a full calendar year of performance.
Information Thus, no bar chart or average annual total returns table is
included for the Fund.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
NFJ Equity Income Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment) None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
------------------------------------------------------------------
Institutional 0.45% None 0.25% 0.70%
------------------------------------------------------------------
Administrative 0.45 0.25% 0.25 0.95
------------------------------------------------------------------
(1) Other Expenses is based on estimated amounts for the current
fiscal year and reflects a 0.25% Administrative Fee paid by the
class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3
------------------------------------------------------------------
Institutional $72 $224
------------------------------------------------------------------
Administrative 97 303
------------------------------------------------------------------
</TABLE>
Prospectus 6
<PAGE>
NFJ Value Fund
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Principal Investment ObjectiveFund Focus Approximate
Investments Seeks long-term Undervalued Capitalization Range
and growth of capital larger More than $2 billion
Strategies and income capitalization
common stocks
Dividend Frequency
Quarterly
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 $2 billion at the time of
investment and below average P/E ratios relative to the market and
their respective industry groups. To achieve income, the Fund
invests a portion of its assets in income-producing (e.g.,
dividend-paying) common stocks.
The Fund's initial selection universe consists of the 1,000
largest publicly traded companies (in terms of market
capitalization) in the U.S. The portfolio managers classify the
universe by industry. They then identify the most undervalued
stocks in each industry based mainly on relative P/E ratios,
calculated both with respect to trailing operating earnings and
forward earnings estimates. After narrowing this universe to
approximately 150 candidates, the portfolio managers select
approximately 40 stocks for the Fund, each representing a
different industry group. The portfolio managers select stocks
based on a quantitative analysis of factors including price
momentum (based on changes in stock price relative to changes in
overall market prices), earnings momentum (based on analysts'
earnings per share estimates and revisions to those estimates),
relative dividend yields, valuation relative to the overall market
and trading liquidity. The Fund's portfolio is generally
rebalanced quarterly. The portfolio managers may also replace a
stock when a stock within the same industry group has a
considerably lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully invested
in common stocks (aside from certain cash management practices).
The Fund may temporarily hold up to 10% of its assets in cash and
cash equivalents for defensive purposes in response to unfavorable
market and other conditions. This would be inconsistent with the
Fund's investment objective and principal strategies.
- -------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
.Market Risk .Value Securities Risk .Management Risk
.Issuer Risk .Credit Risk
Please see "Summary of Principal Risks" following the Fund
Summaries for a description of these and other risks of investing
in the Fund.
- -------------------------------------------------------------------------------
Performance The Fund does not yet have a full calendar year of performance.
Information Thus, no bar chart or average annual total returns table is
included for the Fund.
7 PIMCO Funds: Multi-Manager Series
<PAGE>
NFJ Value Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)
None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
------------------------------------------------------------------
Institutional 0.45% None 0.25% 0.70%
------------------------------------------------------------------
Administrative 0.45 0.25% 0.25 0.95
------------------------------------------------------------------
(1) Other Expenses is based on estimated amounts for the current
fiscal year and reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3
------------------------------------------------------------------
Institutional $72 $224
------------------------------------------------------------------
Administrative 97 303
------------------------------------------------------------------
</TABLE>
Prospectus 8
<PAGE>
NFJ Value 25 Fund
- --------------------------------------------------------------------------------
Principal Investment Objective
Investments Seeks long-term Fund Focus Approximate
and growth of Undervalued Capitalization Range
Strategies capital and medium Between $1 billion and
income capitalization $5 billion
common stocks
Approximate Number Dividend Frequency
of Holdings At least annually
25
The Fund seeks to achieve its investment objective by normally
investing at least 65% of its assets in common stocks of companies
with market capitalizations of between $1 billion and $5 billion
at the time of investment and below average P/E ratios relative to
their respective industry groups. The Fund normally invests in
approximately 25 common stocks. To achieve income, the Fund
invests a portion of its assets in income-producing (e.g.,
dividend-paying) common stocks.
The Fund's initial selection universe consists of approximately
600 stocks of companies within the Fund's capitalization range.
The portfolio managers classify the universe by industry. They
then identify the most undervalued stocks in each industry based
mainly on relative P/E ratios, calculated both with respect to
trailing operating earnings and forward earnings estimates. The
portfolio managers then select approximately 25 stocks, each
representing a different industry group. Each stock has close to
equal weighting in the portfolio. The portfolio managers select
stocks based on an analysis of factors including price momentum
(based on changes in stock price relative to changes in overall
market prices), earnings momentum (based on analysts' earnings per
share estimates and revisions to those estimates), relative
dividend yields and trading liquidity. The Fund's portfolio is
generally rebalanced quarterly. The portfolio managers may also
replace a stock when a stock within the same industry group has a
considerably lower valuation than the Fund's current holding.
Under normal circumstances, the Fund intends to be fully
invested in common stocks (aside from certain cash management
practices). The Fund may temporarily hold up to 25% of its assets
in cash and cash equivalents for defensive purposes in response to
unfavorable market and other conditions. This would be
inconsistent with the Fund's investment objective and principal
strategies.
- --------------------------------------------------------------------------------
Principal Among the principal risks of investing in the Fund, which could
Risks adversely affect its net asset value, yield and total return, are:
. Market Risk . Smaller Company Risk . Credit Risk
. Issuer Risk . Liquidity Risk . Management Risk
. Value Securities 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 does not yet have a full calendar year of performance.
Information Thus, no bar chart or average annual total returns table is
included for the Fund.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
NFJ Value 25 Fund (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Fund:
Fund
Shareholder Fees (fees paid directly from your investment)None
Annual Fund Operating Expenses (expenses that are deducted from
Fund assets):
<TABLE>
<S> <C> <C> <C> <C>
Distribution Total Annual
Advisory and/or Service Other Fund Operating
Share Class Fees (12b-1) Fees Expenses(/1/) Expenses
------------------------------------------------------------------
Institutional 0.50% None 0.25% 0.75%
------------------------------------------------------------------
Administrative 0.50 0.25% 0.25 1.00
------------------------------------------------------------------
(1) Other Expenses reflects a 0.25% Administrative Fee paid by
the class.
Examples. The Examples below are intended to help you compare the
cost of investing in Institutional Class or Administrative Class
shares of the Fund with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the Fund's
operating expenses remain the same. Although your actual costs may
be higher or lower, the Examples show what your costs would be
based on these assumptions.
<CAPTION>
Share Class Year 1 Year 3
------------------------------------------------------------------
<S> <C> <C>
Institutional $ 77 $240
------------------------------------------------------------------
Administrative 102 318
------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
Summary of Principal Risks
The value of your investment in a Fund changes with the values of
that Fund's investments. Many factors can affect those values. The
factors that are most likely to have a material effect on a
particular Fund's portfolio as a whole are called "principal
risks." The principal risks of each Fund are identified in the
Fund Summaries and are summarized in this section. Each Fund may
be subject to additional principal risks and risks other than
those described below because the types of investments made by
each Fund can change over time. Securities and investment
techniques mentioned in this summary and described in greater
detail under "Characteristics and Risks of Securities and
Investment Techniques" appear in bold type. That section and
"Investment Objectives and Policies" in the Statement of
Additional Information also include more information about the
Funds, their investments and the related risks. There is no
guarantee that a Fund will be able to achieve its investment
objective.
Market The market price of securities owned by a Fund may go up or down,
Risk sometimes rapidly or unpredictably. Each of the Funds normally
invests most of its assets in common stocks and/or other equity
securities. A principal risk of investing in each Fund is that the
equity securities in its portfolio will decline in value due to
factors affecting equity securities markets generally or
particular industries represented in those markets. The values of
equity securities may decline due to general market conditions
which are not specifically related to a particular company, such
as real or perceived adverse economic conditions, changes in the
general outlook for corporate earnings, changes in interest or
currency rates or adverse investor sentiment generally. They may
also decline due to factors which affect a particular industry or
industries, such as labor shortages or increased production costs
and competitive conditions within an industry. Equity securities
generally have greater price volatility than fixed income
securities.
Issuer The value of a security may also decline for a number of reasons
Risk which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
Value The Funds place particular emphasis on investing in securities of
Securities companies that may not be expected to experience significant
Risk earnings growth, but whose securities its portfolio manager
believes are selling at a price lower than their true value (value
securities). Companies that issue value securities may have
experienced adverse business developments or may be subject to
special risks that have caused their securities to be out of
favor. If a portfolio manager's assessment of a company's
prospects is wrong, or if the market does not recognize the value
of the company, the price of its securities may decline or may not
approach the value that the portfolio manager anticipates.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk smaller market capitalizations. These companies may have limited
product lines, markets or financial resources or they may depend
on a few key employees. Securities of smaller companies may trade
less frequently and in lesser volume than more widely held
securities and their values may fluctuate more sharply than other
securities. They may also trade in the over-the-counter market or
on a regional exchange, or may otherwise have limited liquidity.
The NFJ Value 25 Fund may have significant exposure to this risk
because it invests substantial assets in companies with medium-
sized market capitalizations, which are smaller and generally
less-seasoned than the largest companies.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
Liquidity All of the Funds are subject to liquidity risk. Liquidity risk
Risk exists when particular investments are difficult to purchase or
sell, possibly preventing a Fund from selling such illiquid
securities at an advantageous time or price. Funds with principal
investment strategies that involve securities of companies with
smaller market capitalizations, foreign securities, derivatives or
securities with substantial market and/or credit risk tend to have
the greatest exposure to liquidity risk.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies increases risk. Funds, such as the NFJ Value
Risk 25 Fund, that invest in a relatively small number of issuers may
have more risk because changes in the value of a single security
or the impact of a single economic, political or regulatory
occurrence may have a greater adverse impact on the Fund's net
asset value. Some of those issuers also may present substantial
credit or other risks. Also, the Funds may from time to time have
greater risk because they invest a substantial portion of their
assets in related industries such as "technology" or "financial
and business services."
Credit All of the Funds are subject to credit risk. This is the risk that
Risk the issuer or the guarantor of a fixed income security, or the
counterparty to a repurchase agreement or a loan of portfolio
securities, is unable or unwilling to make timely principal and/or
interest payments, or to otherwise honor its obligations.
Securities are subject to varying degrees of credit risk, which
are often reflected in their credit ratings.
Management Each Fund is subject to management risk because it is an actively
Risk managed investment portfolio. PIMCO Advisors, NFJ and each
individual portfolio manager will apply investment techniques and
risk analyses in making investment decisions for the Funds, but
there can be no guarantee that these will produce the desired
results.
Prospectus 12
<PAGE>
Management of the Funds
Investment PIMCO Advisors serves as the investment adviser and the
Adviser administrator (serving in its capacity as administrator, the
and "Administrator") for the Funds. Subject to the supervision of
Administrator 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 an affiliated investment management
firm, NFJ Investment Group ("NFJ" or the "Sub-Adviser") to
manage each Fund's investments. See "Sub-Adviser" below. PIMCO
Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Funds in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may
retain other affiliates to provide certain of these services.
Advisory Each Fund pays PIMCO Advisors fees in return for providing or
Fees arranging for the provision of investment advisory services.
PIMCO Advisors (and not the Funds) pays a portion of the
advisory fees it receives to NFJ in return for NFJ's services as
Sub-Adviser.
The Funds pay monthly advisory fees to PIMCO Advisors at the
following annual rates (stated as a percentage of the average
daily net assets of each Fund taken separately):
<TABLE>
<CAPTION>
Fund Advisory Fees
-------------------------------------------------
<S> <C>
NFJ Equity Income and NFJ Value Funds 0.45%
NFJ Value 25 Fund 0.50%
</TABLE>
Administrative Each Fund pays for the administrative services it requires under
Fees 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 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.
Institutional and Administrative Class shareholders of the Funds
pay PIMCO Advisors monthly administrative fees at the annual
rate of 0.25% (stated as a percentage of the average daily net
assets attributable in the aggregate to the Fund's Institutional
and Administrative Class shares):
Sub- The Sub-Adviser has full investment discretion and makes all
Adviser determinations with respect to the investment of a Fund's
assets. The following provides summary information about the
Sub-Adviser, including its investment specialty.
<TABLE>
<CAPTION>
Sub-Adviser Investment Specialty
--------------------------------------------------------------------
<S> <C>
NFJ Investment Group Value stocks that NFJ believes are undervalued
2121 San Jacinto, Suite and/or offer above-average dividend yields
1840
Dallas, TX 75201
</TABLE>
13 PIMCO Funds: Multi-Manager Series
<PAGE>
The following provides additional information about the Sub-
Adviser and the individual Portfolio Manager(s) who have or share
primary responsibility for managing the Funds' investments.
An affiliated sub-partnership of PIMCO Advisors, NFJ provides
advisory services to mutual funds and institutional accounts. NFJ
Investment Group, Inc., the predecessor investment adviser to NFJ,
commenced operations in 1989. Accounts managed by NFJ had combined
assets as of December 31, 1999 of approximately $2.1 billion.
The following individuals at NFJ share primary responsibility for
the noted Funds.
<TABLE>
<CAPTION>
Fund Portfolio Managers Since Recent Professional Experience
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
NFJ Equity Income Chris Najork 2000* Managing Director and founding
partner of NFJ. He has 30 years'
experience encompassing equity
research and portfolio management.
Prior to the formation of NFJ in
1989, he was a senior vice
president, senior portfolio manager
and analyst at NationsBank, which he
joined in 1974.
Benno J. Fischer 2000* Managing Director and founding
partner of NFJ. He has 32 years'
experience in portfolio management,
investment analysis and research.
Prior to the formation of NFJ in
1989, he was chief investment
officer (institutional and fixed
income), senior vice president and
senior portfolio manager at
NationsBank, which he joined in
1971. Prior to joining NationsBank,
Mr. Fischer was a securities analyst
at Chase Manhattan Bank and Clark,
Dodge.
NFJ Value Messrs. Najork and 2000* See above.
Fischer
Paul A. Magnuson 2000* Principal at NFJ. He is a Portfolio
Manager and Senior Research Analyst
with 14 years' experience in equity
analysis and portfolio management.
Prior to joining NFJ in 1992, he was
an assistant vice president at
NationsBank, which he joined in
1985. Within the Trust Investment
Qualitative Services Division of
NationsBank, he was responsible for
equity analytics and structured fund
management.
NFJ Value 25 Messrs. Najork and 2000* See above.
Fischer
E. Clifton Hoover, 2000* Principal at NFJ. He is a Portfolio
Jr. Manager with 13 years' experience in
financial analysis and portfolio
management. Prior to joining NFJ in
1997, he was associated with Credit
Lyonnais from 1991 to 1997, where he
served as a vice president and was
responsible for the financial
analysis and portfolio management of
a diversified portfolio. He began
his career as a financial analyst
with NationsBank in 1985.
</TABLE>
-------
*Since inception of the Fund
Distributor The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stamford, Connecticut 06902, is a broker-
dealer registered with the Securities and Exchange Commission.
Prospectus 14
<PAGE>
Investment Options --
Institutional Class and Administrative Class Shares
The Trust offers investors Institutional Class and Administrative
Class shares of the Funds in this Prospectus.
The Trust does not charge any sales charges (loads) or other fees
in connection with purchases, sales (redemptions) or exchanges of
Institutional Class or Administrative Class shares. See
"Purchases, Redemptions and Exchanges" below.
Administrative Class shares are generally subject to a higher
level of operating expenses than Institutional Class shares due to
the additional service and/or distribution fees paid by
Administrative Class shares as described below. Therefore,
Institutional Class shares will generally pay higher dividends and
have a more favorable investment return than Administrative Class
shares.
. Service and Distribution (12b-1) Fees--Administrative Class
Shares. The Trust has adopted both an Administrative Services Plan
and a Distribution Plan for the Administrative Class shares of
each Fund. Each Plan has been adopted in accordance with the
requirements of Rule 12b-1 under the Investment Company Act of
1940 and is administered in accordance with that rule. However,
shareholders do not have the voting rights set forth in Rule 12b-1
with respect to the Administrative Services Plan.
Each Plan allows the Funds to use its Administrative Class assets
to reimburse financial intermediaries that provide services
relating to Administrative Class shares. The Distribution Plan
permits reimbursement for expenses in connection with the
distribution and marketing of Administrative Class shares and/or
the provision of shareholder services to Administrative Class
shareholders. The Administrative Services Plan permits
reimbursement for services in connection with the administration
of plans or programs that use Administrative Class shares of the
Funds as their funding medium and for related expenses.
In combination, the Plans permit a Fund to make total
reimbursements at an annual rate of up to 0.25% of the Fund's
average daily net assets attributable to its Administrative Class
shares. The same entity may not receive both distribution and
administrative services fees with respect to the same
Administrative Class assets, but may receive fees under each Plan
with respect to separate assets. Because these fees are paid out
of a Fund's Administrative Class assets on an ongoing basis, over
time they will increase the cost of an investment in
Administrative Class shares and may cost an investor more than
other types of sales charges.
. Arrangements with Service Agents. Institutional Class and
Administrative Class shares of the Funds may be offered through
certain brokers and financial intermediaries ("service agents")
that have established a shareholder servicing relationship with
the Trust on behalf of their customers. The Trust pays no
compensation to such entities other than service and/or
distribution fees paid with respect to Administrative Class
shares. Service agents may impose additional or different
conditions than the Trust on purchases, redemptions or exchanges
of Fund shares by their customers. Service agents may also
independently establish and charge their customers transaction
fees, account fees and other amounts in connection with purchases,
sales and redemptions of Fund shares in addition to any fees
charged by the Trust. These additional fees may vary over time and
would increase the cost of the customer's investment and lower
investment returns. Each service agent is responsible for
transmitting to its customers a schedule of any such fees and
information regarding any additional or different conditions
regarding purchases, redemptions and exchanges. Shareholders who
are customers of service agents should consult their service
agents for information regarding these fees and conditions.
15 PIMCO Funds: Multi-Manager Series
<PAGE>
Purchases, Redemptions and Exchanges
Purchasing Investors may purchase Institutional Class and Administrative
Shares Class shares of the Funds at the relevant net asset value ("NAV")
of that class without a sales charge or other fee.
Institutional Class shares are offered primarily for direct
investment by investors such as pension and profit sharing plans,
employee benefit trusts, endowments, foundations, corporations and
high net worth individuals. Institutional Class shares may also be
offered through certain financial intermediaries that charge their
customers transaction or other fees with respect to their
customers' investments in the Funds.
Administrative Class shares are offered primarily through
employee benefit plan alliances, broker-dealers and other
intermediaries, and each Fund pays service and/or distribution
fees to these entities for services they provide to Administrative
Class shareholders.
Pension and profit-sharing plans, employee benefit trusts and
employee benefit plan alliances and "wrap account" programs
established with broker-dealers or financial intermediaries may
purchase shares of either class only if the plan or program for
which the shares are being acquired will maintain an omnibus or
pooled account for each Fund and will not require a Fund to pay
any type of administrative payment per participant account to any
third party.
. Investment Minimums. The minimum initial investment for shares
of either class is $5 million, except that the minimum initial
investment for a registered investment adviser purchasing
Institutional Class shares for its clients through omnibus
accounts is $250,000 per Fund. At the discretion of PIMCO
Advisors, the minimum initial investment may be waived for
Institutional or Administrative Class shares offered to clients of
PIMCO Advisors, NFJ and their affiliates. In addition, the minimum
initial investment does not apply to Institutional Class shares
offered through fee-based programs sponsored and maintained by a
registered broker-dealer and approved by the Distributor in which
each investor pays an asset based fee at an annual rate of at
least 0.50% of the assets in the account to a financial
intermediary for investment advisory and/or administrative
services.
The Trust and the Distributor may waive the minimum initial
investment for other categories of investors at their discretion.
. Timing of Purchase Orders and Share Price Calculations. A
purchase order received by the Trust's transfer agent, National
Financial Data Services (the "Transfer Agent"), prior to the close
of regular trading (normally 4:00 p.m., Eastern time) on the New
York Stock Exchange, on a day the Trust is open for business,
together with payment made in one of the ways described below,
will be effected at that day's net asset value ("NAV"). An order
received after the close of regular trading on the New York Stock
Exchange will be effected at the NAV determined on the next
business day. However, orders received by certain retirement plans
and other financial intermediaries on a business day prior to the
close of regular trading on the New York Stock Exchange and
communicated to the Transfer Agent prior to 9:00 a.m., Eastern
time, on the following business day will be effected at the NAV
determined on the prior business day. The Trust is "open for
business" on each day the New York Stock Exchange is open for
trading, which excludes the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Purchase orders will be accepted only on days on
which the Trust is open for business.
. Initial Investment. Investors may open an account by
completing and signing a Client Registration Application and
mailing it to PIMCO Funds at 840 Newport Center Drive, Suite 300,
Newport Beach, California 92660. A Client Registration Application
may be obtained by calling 1-800-927-4648.
Prospectus 16
<PAGE>
Except as described below, an investor may purchase Institutional
Class and Administrative Class shares only by wiring federal funds
to the Transfer Agent, National Financial Data Services, 330 West
9th Street, 4th Floor, Kansas City, Missouri 64105. Before wiring
federal funds, the investor must telephone the Trust at 1-800-927-
4648 to receive instructions for wire transfer and must provide
the following information: name of authorized person, shareholder
name, shareholder account number, name of Fund and share class,
amount being wired, and wiring bank name.
An investor may purchase shares without first wiring federal
funds if the proceeds of the investment are derived from an
advisory account the investor maintains with PIMCO Advisors or one
of its affiliates or from an investment by broker-dealers,
institutional clients or other financial intermediaries which have
established a shareholder servicing relationship with the Trust on
behalf of their customers.
. Additional Investments. An investor may purchase additional
Institutional Class and Administrative Class shares of the Funds
at any time by calling the Trust and wiring federal funds to the
Transfer Agent as outlined above.
. Other Purchase Information. Purchases of a Fund's
Institutional Class and Administrative Class shares will be made
in full and fractional shares. In the interest of economy and
convenience, certificates for shares will not be issued.
The Trust and the Distributor each reserves the right, in its
sole discretion, to suspend the offering of shares of the Funds or
to reject any purchase order, in whole or in part, when, in the
judgment of management, such suspension or rejection is in the
best interests of the Trust.
An investor should invest in the Funds for long-term investment
purposes only. The Trust, PIMCO Advisors and NFJ each reserve the
right to restrict purchases of Fund shares (including exchanges)
when a pattern of frequent purchases and sales made in response to
short-term fluctuations in share price appears evident. Notice of
any such restrictions, if any, will vary according to the
particular circumstances.
Institutional Class and Administrative Class shares of the Trust
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 NFJ
intends to retain the security in the Fund as an investment.
Assets purchased by a Fund in such a transaction will be valued in
generally the same manner as they would be valued for purposes of
pricing the Fund's shares, if such assets were included in the
Fund's assets at the time of purchase. The Trust reserves the
right to amend or terminate this practice at any time.
. Retirement Plans. Shares of the Funds are available for
purchase by retirement and savings plans, including Keogh plans,
401(k) plans, 403(b) custodial accounts, and Individual Retirement
Accounts. The administrator of a plan or employee benefits office
can provide participants or employees with detailed information on
how to participate in the plan and how to elect a Fund as an
investment option. Participants in a retirement or savings plan
may be permitted to elect different investment options, alter the
amounts contributed to the plan, or change how contributions are
allocated among investment options in accordance
17 PIMCO Funds: Multi-Manager Series
<PAGE>
with the plan's specific provisions. The plan administrator or
employee benefits office should be consulted for details. For
questions about participant accounts, participants should contact
their employee benefits office, the plan administrator, or the
organization that provides recordkeeping services for the plan.
Investors who purchase shares through retirement plans should be
aware that plan administrators may aggregate purchase and
redemption orders for participants in the plan. Therefore, there
may be a delay between the time the investor places an order with
the plan administrator and the time the order is forwarded to the
Transfer Agent for execution.
Redeeming . Redemptions by Mail. An investor may redeem (sell)
Shares Institutional Class and Administrative Class shares by submitting
a written request to PIMCO Funds at 840 Newport Center Drive,
Suite 300, Newport Beach, California 92660. The redemption request
should state the 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.
Prospectus 18
<PAGE>
Defined contribution plan participants may request redemptions by
contacting the employee benefits office, the plan administrator or
the organization that provides recordkeeping services for the
plan.
. Other Redemption Information. Redemption requests for Fund
shares are effected at the NAV per share next determined after
receipt of a redemption request by the Trust or its designee. The
request must properly identify all relevant information, such as
account number, redemption amount (in dollars or shares) and the
Fund name, and must be executed or initialed by the appropriate
signatories. A redemption request received by the Trust or its
designee prior to the close of regular trading on the New York
Stock Exchange (normally 4:00 p.m., Eastern time), on a day the
Trust is open for business, is effective on that day. A redemption
request received after that time becomes effective on the next
business day.
Redemption proceeds will ordinarily be wired to the investor's
bank within three business days after the redemption request, but
may take up to seven business days. Redemption proceeds will be
sent by wire only to the bank name designated on the Client
Registration Application. The Trust may suspend the right of
redemption or postpone the payment date at times when the New York
Stock Exchange is closed, or during certain other periods as
permitted under the federal securities laws.
For shareholder protection, a request to change information
contained in an account registration (for example, a request to
change the bank designated to receive wire redemption proceeds)
must be received in writing, signed by the minimum number of
persons designated on the Client Registration Application that are
required to effect a redemption, and accompanied by a signature
guarantee from any eligible guarantor institution, as determined
in accordance with the Trust's procedures. Shareholders should
inquire as to whether a particular institution is an eligible
guarantor institution. A signature guarantee cannot be provided by
a notary public. In addition, corporations, trusts, and other
institutional organizations are required to furnish evidence of
the authority of the persons designated on the Client Registration
Application to effect transactions for the organization.
Due to the relatively high cost of maintaining small accounts,
the Trust reserves the right to redeem Institutional Class and
Administrative Class shares in any account for their then-current
value (which will be promptly paid to the investor) if at any
time, due to redemption by the investor, the shares in the account
do not have a value of at least $100,000. A shareholder will
receive advance notice of a mandatory redemption and will be given
at least 30 days to bring the value of its account up to at least
$100,000.
The Trust agrees to redeem shares of each Fund solely in cash up
to the lesser of $250,000 or 1% of the Fund's net assets during
any 90-day period for any one shareholder. In consideration of the
best interests of the remaining shareholders, the Trust reserves
the right to pay any redemption proceeds exceeding this amount in
whole or in part by a distribution in kind of securities held by a
Fund in lieu of cash. Except for Funds with a tax-efficient
management strategy, it is highly unlikely that shares would ever
be redeemed in kind. When shares are redeemed in kind, the
redeeming shareholder should expect to incur transaction costs
upon the disposition of the securities received in the
distribution.
Redemptions of Fund shares may be suspended when trading on the
New York Stock Exchange is restricted or during an emergency which
makes it impracticable for the Funds to dispose of their
securities or to determine fairly the value of their net assets,
or during any other period as permitted by the Securities and
Exchange Commission for the protection of investors. Under these
and other unusual circumstances, the Trust may suspend redemptions
or postpone payment for more than seven days, as permitted by law.
Exchange An investor may exchange Institutional Class or Administrative
Privilege Class shares of a Fund described in this prospectus for shares of
the same class of any other Fund described in this prospectus
based on the respective NAVs of the shares involved. An exchange
may be made by following the redemption procedure described
19 PIMCO Funds: Multi-Manager Series
<PAGE>
above under "Redemptions by Mail" or, if the investor has elected
the telephone redemption option, by calling the Trust at 1-800-
927-4648.
An investor may exchange shares only with respect to Funds or
other eligible series that are registered in the investor's state
of residence or where an exemption from registration is available.
In addition, an exchange is generally a taxable event which will
generate capital gains or losses, and special rules may apply in
computing tax basis when determining gain or loss. See "Tax
Consequences" in this Prospectus and "Taxation" in the Statement
of Additional Information.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Fund and its shareholders. In particular, a pattern of
exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Fund. The Trust reserves the right to impose additional
restrictions on exchanges at any time, although it will attempt to
give shareholders 30 days' prior notice whenever it is reasonably
able to do so.
How Fund Shares Are Priced
The net asset value ("NAV") of a Fund's Institutional and
Administrative Class shares is determined by dividing the total
value of a Fund's portfolio investments and other assets
attributable to that class, less any liabilities, by the total
number of shares outstanding of that class.
For purposes of calculating the NAV, portfolio securities and
other assets for which market quotes are available are stated at
market value. Market value is generally determined on the basis of
last reported sales prices, or if no sales are reported, based on
quotes obtained from a quotation reporting system, established
market makers, or pricing services. Certain securities or
investments for which daily market quotes are not readily
available may be valued, pursuant to 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, 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.
Prospectus 20
<PAGE>
Under certain circumstances, the per share NAV of the
Administrative Class shares of the Funds may be lower than the per
share NAV of the Institutional Class shares as a result of the
daily expense accruals of the service and/or distribution fees
paid by Administrative Class shares. Generally, for Funds that pay
income dividends, those dividends are expected to differ over time
by approximately the amount of the expense accrual differential
between the two classes.
Fund Distributions
Each Fund distributes substantially all of its net investment
income to shareholders in the form of dividends. A shareholder
begins earning dividends on Fund shares the day after the Trust
receives the shareholder's purchase payment. Dividends paid by
each Fund with respect to each class of shares are calculated in
the same manner and at the same time, but dividends on
Administrative Class shares are expected to be lower than
dividends on Institutional Class shares as a result of the service
and/or distribution fees applicable to Administrative Class
shares.
The NFJ Equity Income and NFJ Value Funds each intend to declare
and distribute income dividends to shareholders of record at least
quarterly. The NFJ Value 25 Fund intends to declare and distribute
income dividends to shareholders of record at least annually. In
addition, each Fund distributes any net capital gains it earns
from the sale of portfolio securities to shareholders no less
frequently than annually. Net short-term capital gains may be paid
more frequently.
A Fund's dividend and capital gain distributions with respect to
a particular class of shares will automatically be reinvested in
additional shares of the same class of the Fund at NAV unless the
shareholder elects to have the distributions paid in cash. A
shareholder may elect to have distributions paid in cash on the
Client Registration Application or by submitting a written
request, signed by the appropriate signatories, indicating the
account number, Fund name(s) and wiring instructions. Shareholders
do not pay any sales charges or other fees on shares received
through the reinvestment of Fund distributions.
For further information on distribution options, please contact
the Trust at 1-800-927-4648.
Tax Consequences
. Taxes on Fund Distributions. A shareholder subject to U.S.
federal income tax will be subject to tax on Fund distributions
whether they are paid in cash or reinvested in additional shares
of the Funds. For federal income tax purposes, Fund distributions
will be taxable to the shareholder as either ordinary income or
capital gains.
Fund dividends (i.e., distributions of investment income) are
taxable to shareholders as ordinary income. Federal taxes on Fund
distributions of gains are determined by how long the Fund owned
the investments that generated the gains, rather than how long the
shareholder owned the shares. Distributions of gains from
investments that a Fund owned for more than 12 months will
generally be taxable to shareholders as capital gains.
Distributions of gains from investments that the Fund owned for 12
months or less will generally be taxable as ordinary income.
Fund distributions are taxable to shareholders even if they are
paid from income or gains earned by a Fund prior to the
shareholder's investment and thus were included in the price paid
for the shares. For example, a shareholder who purchases shares on
or just before the record date of a Fund distribution will pay
full price for the shares and may receive a portion of his or her
investment back as a taxable distribution.
21 PIMCO Funds: Multi-Manager Series
<PAGE>
. Taxes on Redemptions or Exchanges of Shares. Any gain
resulting from the sale of Fund shares will generally be
subject to federal income tax. When a shareholder exchanges
shares of a Fund for shares of another series, the transaction
generally will be treated as a sale of the Fund shares for
these purposes, and any gain on those shares will generally be
subject to federal income tax.
. A Note on Foreign Investments. A Fund's investments in
foreign securities, if any, may be subject to foreign
withholding taxes. In that case, the Fund's yield on those
securities would be decreased. In addition, a Fund's
investments in foreign securities or foreign currencies may
increase or accelerate the Fund's recognition of ordinary
income and may affect the timing or amount of the Fund's
distributions.
This section relates only to federal income tax; the
consequences under other tax laws may differ. Shareholders
should consult their tax advisors as to the possible
application of foreign, state and local income tax laws to Fund
dividends and capital distributions. Please see the Statement
of Additional Information for additional information regarding
the tax aspects of investing in the Funds.
Characteristics and Risks of
Securities and Investment Techniques
This section provides additional information about some of the
principal investments and related risks of the Funds identified
under "Summary Information" above. It also describes
characteristics and risks of additional securities and
investment techniques that are not necessarily principal
investments or strategies but may be used by the Funds from
time to time. Most of these securities and investment
techniques are discretionary, which means that the portfolio
managers can decide whether to use them or not. This Prospectus
does not attempt to disclose all of the various types of
securities and investment techniques that may be used by the
Funds. As with any mutual fund, investors in the Funds must
rely on the professional investment judgment and skill of the
Funds' Adviser and Sub-Adviser and the individual portfolio
managers. Please see "Investment Objectives and Policies" in
the Statement of Additional Information for more detailed
information about the securities and investment techniques
described in this section and about other strategies and
techniques that may be used by the Funds.
Fixed Fixed income securities are obligations of the issuer to make
Income payments of principal and/or interest on future dates, and
Securities include corporate and government bonds, notes, certificates of
and deposit, commercial paper, convertible securities and mortgage-
Defensive backed and other asset-backed securities.
Strategies
Under normal circumstances, the Funds intend to be fully
invested in common stocks (aside from cash management
practices), except that each of the Funds may temporarily hold
up to 10% of its assets in cash and cash equivalents for
defensive purposes in response to unfavorable market and other
conditions. These temporary defensive strategies would be
inconsistent with the investment objective and principal
investment strategies of each of the Funds and may adversely
affect a Fund's ability to achieve its investment objective.
Companies Each of the Funds may invest in securities of companies with
With market capitalizations that are small compared to other
Smaller publicly traded companies. The NFJ Value 25 Fund has
Market significant exposure to the risks described below because it
Capitalizations invests primarily in companies with medium-sized market
capitalization, 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
Prospectus 22
<PAGE>
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 Each of the Funds may invest in foreign securities, including
Securities American Depository Receipts ("ADRs"). 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.
Investing in foreign securities involves special risks and
considerations not typically associated with investing in U.S.
securities and shareholders should consider carefully the
substantial risks involved for Funds that invest in these
securities. These risks include: differences in accounting,
auditing and financial reporting standards; generally higher
commission rates on foreign portfolio transactions; the
possibility of nationalization, expropriation or confiscatory
taxation; adverse changes in investment or exchange control
regulations; and political instability. Individual foreign
economies may differ favorably or unfavorably from the U.S.
economy in such respects as growth of gross domestic product, rate
of inflation, capital reinvestment, resources, self-sufficiency
and balance of payments position. The securities markets, values
of securities, yields and risks associated with foreign securities
markets may change independently of each other. Also, foreign
securities and dividends and interest payable on those securities
may be subject to foreign taxes, including taxes withheld from
payments on those securities. Foreign securities often trade with
less frequency and volume than domestic securities and therefore
may exhibit greater price volatility. Investments in foreign
securities may also involve higher custodial costs than domestic
investments and additional transaction costs with respect to
foreign currency conversions. Changes in foreign exchange rates
also will affect the value of securities denominated or quoted in
foreign currencies.
23 PIMCO Funds: Multi-Manager Series
<PAGE>
Foreign A Fund that invests directly in foreign currencies or in
Currencies securities that trade in, and receive revenues in, foreign
currencies will be subject to currency risk. Foreign currency
exchange rates may fluctuate significantly over short periods of
time. They generally are determined by supply and demand and the
relative merits of investments in different countries, actual or
perceived changes in interest rates and other complex factors.
Currency exchange rates also can be affected unpredictably by
intervention (or the failure to intervene) by U.S. or foreign
governments or central banks, or by currency controls or political
developments. For example, significant uncertainty surrounds the
recent introduction of the euro (a common currency unit for the
European Union) in January 1999 and the effect it may have on the
value of securities denominated in local European currencies.
These and other currencies in which the Funds' assets are
denominated may be devalued against the U.S. dollar, resulting in
a loss to the Funds.
Convertible Each Fund may invest in convertible securities. Convertible
Securities securities are generally preferred stocks and other securities,
including fixed income securities and warrants, that are
convertible into or exercisable for common stock at either a
stated price or a stated rate. The price of a convertible security
will normally vary in some proportion to changes in the price of
the underlying common stock because of this conversion or exercise
feature. However, the value of a convertible security may not
increase or decrease as rapidly as the underlying common stock. A
convertible security will normally also provide income and is
subject to interest rate risk. While convertible securities
generally offer lower interest or dividend yields than non-
convertible fixed income securities of similar quality, their
value tends to increase as the market value of the underlying
stock increases and to decrease when the value of the underlying
stock decreases. Also, a Fund may be forced to convert a security
before it would otherwise choose, which may have an adverse effect
on the Fund's ability to achieve its investment objective.
Credit The Funds may invest in securities based on their credit ratings
Ratings assigned by rating agencies such as Moody's Investors Service,
and Inc. ("Moody's") and Standard & Poor's Ratings Services ("S&P").
Unrated Moody's, S&P and other rating agencies are private services that
Securities provide ratings of the credit quality of fixed income securities,
including convertible securities. The Appendix to the Statement of
Additional Information describes the various ratings assigned to
fixed income securities by Moody's and S&P. Ratings assigned by a
rating agency are not absolute standards of credit quality and do
not evaluate market risk. Rating agencies may fail to make timely
changes in credit ratings and an issuer's current financial
condition may be better or worse than a rating indicates. A Fund
will not necessarily sell a security when its rating is reduced
below its rating at the time of purchase. PIMCO Advisors and NFJ
do not rely solely on credit ratings, and develop their own
analysis of issuer credit quality.
A Fund may purchase unrated securities (which are not rated by a
rating agency) if its portfolio manager determines that the
security is of comparable quality to a rated security that the
Fund may purchase. Unrated securities may be less liquid than
comparable rated securities and involve the risk that the
portfolio manager may not accurately evaluate the security's
comparative credit rating.
Loans of For the purpose of achieving income, each Fund may lend its
Portfolio portfolio securities to brokers, dealers, and other financial
Securities institutions provided a number of conditions are satisfied,
including that the loan is fully collateralized. Please see
"Investment Objectives and Policies" in the Statement of
Additional Information for details. When a Fund lends portfolio
securities, its investment performance will continue to reflect
changes in the value of the securities loaned, and the Fund will
also receive a fee or interest on the collateral. Securities
lending involves the risk of loss of rights in the collateral or
delay in recovery of the collateral if the borrower fails to
return the security loaned or becomes insolvent. A Fund may pay
lending fees to the party arranging the loan.
Prospectus 24
<PAGE>
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. Repurchase agreements maturing in more than
seven days are considered illiquid securities.
Reverse Each Fund may enter into reverse repurchase agreements, subject to
Repurchase the Fund's limitations on borrowings. A reverse repurchase
Agreements agreement involves the sale of a security by a Fund and its
and Other agreement to repurchase the instrument at a specified time and
Borrowings price, and may be considered a form of borrowing for some
purposes. A Fund will segregate assets determined to be liquid by
PIMCO Advisors or NFJ in accordance with procedures established by
the Board of Trustees to cover its obligations under reverse
repurchase agreements. A Fund also may borrow money for investment
purposes subject to any policies of the Fund currently described
in this Prospectus or in the Statement of Additional Information.
Reverse repurchase agreements and other forms of borrowings may
create leveraging risk for a Fund.
Illiquid Each Fund may invest in securities that are illiquid so long as
Securities not more than 15% of the value of the Fund's net assets (taken at
market value at the time of investment) would be invested in such
securities. Certain illiquid securities may require pricing at
fair value as determined in good faith under the supervision of
the Board of Trustees. A portfolio manager may be subject to
significant delays in disposing of illiquid securities held by the
Fund, and transactions in illiquid securities may entail
registration expenses and other transaction costs that are higher
than those for transactions in liquid securities. The term
"illiquid securities" for this purpose means securities that
cannot be disposed of within seven days in the ordinary course of
business at approximately the amount at which a Fund has valued
the securities. Please see "Investment Objectives and Policies" in
the Statement of Additional Information for a listing of various
securities that are generally considered to be illiquid for these
purposes. Restricted securities, i.e., securities subject to legal
or contractual restrictions on resale, may be illiquid. However,
some restricted securities (such as securities issued pursuant to
Rule 144A under the Securities Act of 1933 and certain commercial
paper) may be treated as liquid, although they may be less liquid
than registered securities traded on established secondary
markets.
25 PIMCO Funds: Multi-Manager Series
<PAGE>
Investment Each of the Funds may invest up to 5% of its assets in securities
in Other of other investment companies, such as closed-end management
Investment investment companies, or in other pooled investment vehicles. As a
Companies shareholder of an investment company, a Fund may indirectly bear
service and other fees which are in addition to the fees the Fund
pays its service providers.
Portfolio The length of time a Fund has held a particular security is not
Turnover generally a consideration in investment decisions. A change in the
securities held by a Fund is known as "portfolio turnover." Each
Fund may engage in active and frequent trading of portfolio
securities to achieve its investment objective and principal
investment strategies, particularly during periods of volatile
market movements. High portfolio turnover (e.g., over 100%)
involves correspondingly greater expenses to a Fund, including
brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other
securities. Such sales may also result in realization of taxable
capital gains, including short-term capital gains (which are taxed
at ordinary income tax rates when distributed to shareholders who
are individuals). The trading costs and tax effects associated
with portfolio turnover may adversely affect a Fund's performance.
Changes The investment objective of each Fund may be changed by the Board
in of Trustees without shareholder approval. Unless otherwise stated
Investment in the Statement of Additional Information, all investment
Objectives policies of the Funds may be changed by the Board of Trustees
and without shareholder approval. If there is a change in a Fund's
Policies investment objective or policies, including a change approved by
shareholder vote, shareholders should consider whether the Fund
remains an appropriate investment in light of their then current
financial position and needs.
New Funds In addition to the risks described under "Summary of Principal
Risks" above and in this section, the Funds are newly formed and
therefore have no history upon which investors can evaluate their
likely performance. Accordingly, there can be no assurance that
the Funds will achieve their investment objectives. Also, it is
possible that the Funds may invest in securities offered in
initial public offerings and other similar transactions which,
because of each Fund's size, may have a disproportionate impact on
such Fund's performance results. The Funds would not necessarily
have achieved the same performance results if their aggregate net
assets had been greater.
Percentage Unless otherwise stated, all percentage limitations on Fund
Investment investments listed in this Prospectus will apply at the time of
Limitations investment. A Fund would not violate these limitations unless an
excess or deficiency occurs or exists immediately after and as a
result of an investment.
Other The Funds may invest in other types of securities and use a
Investments variety of investment techniques and strategies which are not
and described in this Prospectus. These securities and techniques may
Techniques subject the Funds to additional risks. Please see the Statement of
Additional Information for additional information about the
securities and investment techniques described in this Prospectus
and about additional securities and techniques that may be used by
the Funds.
Financial Highlights
The Funds did not offer Institutional or Administrative Class
shares during the periods ended December 31, 1999. Therefore,
financial highlights are not provided for the Funds.
Prospectus 26
<PAGE>
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<PAGE>
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<PAGE>
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<PAGE>
-------------------------------------------------------------------
PIMCO INVESTMENT ADVISER AND ADMINISTRATOR
Funds: PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Multi- 92660
Manager -------------------------------------------------------------------
Series SUB-ADVISER
NFJ Investment Group, 2121 San Jacinto, Suite 1840, Dallas, TX
75201
-------------------------------------------------------------------
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.
File No. 811-6161
[PIMCO Logo appears here]
PIMCO Funds
Multi-Manager Series
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
<PAGE>
PIMCO Funds Prospectus
<TABLE>
<S> <C>
Asset Allocation ACTIVELY MANAGED PORTFOLIOS OF SELECT PIMCO FUNDS
Series
PIMCO Funds Asset Allocation Series consists of three
April 3, 2000 actively managed mutual funds that invest in a
diversified portfolio of PIMCO Funds. In addition to
Share Classes broad diversification, each Portfolio provides access
"(Ins)" Institutional to the extensive asset allocation and investment
management capabilities of PIMCO Advisors L.P. and its
"(Adm)" Administrative affiliates.
90/10 Portfolio
Seeks long-term capital appreciation. The Portfolio
normally invests approximately 90% of its assets in
PIMCO Stock Funds and 10% in PIMCO Bond Funds.
60/40 Portfolio
Seeks long-term capital appreciation and current
income. The Portfolio normally invests approximately
60% of its assets in PIMCO Stock Funds and 40% in PIMCO
Bond Funds.
30/70 Portfolio
Seeks current income, with long-term capital
appreciation as a secondary objective. The Portfolio
normally invests approximately 30% of its assets in
PIMCO Stock Funds and 70% in PIMCO Bond Funds.
</TABLE>
This cover is not part of the Prospectus.
[PIMCO FUNDS LOGO APPEARS HERE]
<PAGE>
PIMCO Funds Prospectus
This Prospectus describes three actively managed mutual fund
PIMCO Portfolios offered by PIMCO Funds: Multi-Manager Series (the
Funds: "Trust").
Multi-Manager
Series Asset Allocation Series -- 90/10 Portfolio
Asset Allocation Series -- 60/40 Portfolio
April 3, 2000 Asset Allocation Series -- 30/70 Portfolio
Each Portfolio invests in a diversified portfolio of other
PIMCO Funds. This Prospectus explains what you should know
about the Portfolios before you invest. Please read it
carefully.
Share
Classes
Institutional and
Administrative
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this
Prospectus is truthful or complete. Any representation to
the contrary is a criminal offense.
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information.............................................. 3
Portfolio Summaries
90/10 Portfolio................................................ 5
60/40 Portfolio................................................ 8
30/70 Portfolio................................................ 11
Summary of Principal Risks....................................... 14
Investment Objectives and Principal Investment Strategies........ 20
Underlying Funds................................................. 23
Other Risk Information........................................... 26
Management of the Portfolios..................................... 26
Investment Options - Institutional Class and Administrative Class
Shares ......................................................... 29
Purchases, Redemptions and Exchanges............................. 30
How Portfolio Shares Are Priced.................................. 33
Portfolio Distributions.......................................... 34
Tax Consequences................................................. 34
Financial Highlights............................................. 37
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The Portfolios are intended for investors who prefer to have their
asset allocation decisions made by professional money managers.
Each Portfolio has a distinct investment objective which it seeks
to achieve by investing within specified equity and fixed income
targets and ranges among certain Funds in the PIMCO Funds family.
The Portfolios invest only in Funds in the PIMCO Funds family. The
PIMCO Funds in which the Portfolios invest are called Underlying
Funds or Funds in this Prospectus.
Some of the Underlying Funds invest primarily in equity
securities and are called Underlying Stock Funds. Other Underlying
Funds invest primarily in fixed income securities, including money
market instruments, and are called Underlying Bond Funds. The
Portfolios are named according to their equity/fixed income
allocation targets. For instance, the 90/10 Portfolio will
normally invest approximately 90% of its assets in Underlying
Stock Funds and 10% of its assets in Underlying Bond Funds.
The table below lists the investment objectives and compares the
asset allocation strategies of the Portfolios. Other important
characteristics are described in the individual Portfolio
Summaries beginning on page 5, and are discussed in greater detail
under "Investment Objectives and Principal Investment Strategies."
A "Summary of Principal Risks" begins on page 11.
<TABLE>
<CAPTION>
PIMCO Funds
Asset Allocation Series Investment Objective Allocation Strategy
----------------------------------------------------------------------
<C> <C> <S>
90/10 Portfolio Long-term capital Under normal conditions,
appreciation approximately 90% (range
of 80%-100%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 10% (range of 0%-
20%) among Underlying
Bond Funds
----------------------------------------------------------------------
60/40 Portfolio Long-term capital Under normal conditions,
appreciation and approximately 60% (range
current income of 50%-70%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 40% (range of 30%-
50%) among Underlying
Bond Funds
----------------------------------------------------------------------
30/70 Portfolio Current income, with Under normal conditions,
long-term capital approximately 30% (range
appreciation as of 25%-35%) of the
a secondary objective Portfolio's assets will
be allocated among
Underlying Stock Funds
and 70% (range of 65%-
75%) among Underlying
Bond Funds
</TABLE>
Risk/Return An investor should choose among the Portfolios based on personal
Comparison investment objectives, investment time horizon, tolerance for risk
and personal financial circumstances. Generally speaking,
historical data suggests that the longer the time horizon, the
greater the likelihood that the total return of a portfolio that
invests primarily in equity securities will be higher than the
total return of a portfolio that invests primarily in fixed income
securities. However, an equity portfolio is generally subject to
higher levels of overall risk and price volatility than a fixed
income portfolio and is considered to be a more aggressive
investment. Based on these assumptions, the following chart gives
some indication of the comparative risk/return potential of the
Portfolios according to their equity/fixed income allocation
targets and ranges. Note that these assumptions may not be correct
in future market conditions and the chart may not accurately
predict the actual comparative risk/return of the Portfolios under
all market conditions.
90/10 Portfolio might be suitable for investors that have a
relatively long time horizon, seek long-term capital
appreciation potential and have a fairly high tolerance for
risk and volatility.
60/40 Portfolio might be suitable for investors that have a
medium-range time horizon, seek a balance of long-term
capital appreciation potential and income and have medium
tolerance for risk and volatility.
30/70 Portfolio might be suitable for investors that have a
shorter time horizon, seek a higher level of income
combined with some potential for long-term capital
appreciation and have a lower tolerance for risk and
volatility.
It is possible to lose money on investments in the Portfolios.
While each Portfolio provides a relatively high level of
diversification in comparison to most mutual funds, a single
Portfolio may not be suitable as a complete investment program. An
investment in a Portfolio is not a deposit of a bank and is not
guaranteed or insured by the Federal Deposit Insurance Corporation
or any other government agency.
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
Asset PIMCO Advisors L.P. serves as the investment adviser to the
Allocation Portfolios. PIMCO Advisors' Asset Allocation Committee determines
Strategies how each Portfolio allocates and reallocates its assets among the
Underlying Funds according to the Portfolio's equity/fixed income
allocation targets and ranges. The Committee attempts to diversify
each Portfolio's assets broadly among the major asset classes and
sub-classes represented by the Underlying Funds.
The major equity asset classes and sub-classes held by the
Underlying Stock Funds include those categorized by investment
style/category (growth, blend, value, enhanced index, sector-
related), region (U.S. equities, international developed markets,
international emerging markets), and market capitalization (large-
cap, mid-cap and small-cap). The major fixed income asset classes
and sub-classes held by the Underlying Bond Funds include those
categorized by sector/investment specialty (government securities,
mortgage-related securities, corporate bonds and inflation-indexed
bonds), region (U.S. fixed income, developed foreign fixed income,
emerging markets fixed income), credit quality (investment
grade/money market, medium grade, high yield), and duration (long-
term, intermediate-term and short-term).
Please see "Underlying Funds" in this Prospectus for a
description of the Underlying Funds as categorized by their
investment styles and main investments.
The Portfolios may invest in any or all of the Underlying Funds,
but will not normally invest in every Underlying Fund at any
particular time. Each Portfolio may invest in shares of the same
Underlying Funds; however, the percentage of each Portfolio's
assets so invested will vary depending on the Portfolio's
investment objective. The Asset Allocation Committee does not
allocate a Portfolio's assets according to a predetermined blend
of particular Underlying Funds. Instead, the Committee meets
regularly to determine the mix of Underlying Funds appropriate for
each Portfolio by allocating among the asset classes and sub-
classes held by the Underlying Funds. When making these decisions,
the Committee considers various quantitative and qualitative data
relating to the U.S. and foreign economies and securities markets.
This data includes projected growth trends in the U.S. and foreign
economies, forecasts for interest rates and the relationship
between short- and long-term interest rates (yield curve), current
and projected trends in inflation, relative valuation levels in
the equity and fixed income markets and various segments within
those markets, the outlook and projected growth of various
industrial sectors, information relating to business cycles,
borrowing trends and the cost of capital, political trends, data
relating to trade balances and labor information. The Committee
may also consider proprietary research provided by the investment
advisers and sub-advisers of the Underlying Funds.
The Committee then selects representative Underlying Funds for
each Portfolio to fill out the asset class and sub-class
weightings it has identified according to the Portfolio's
equity/fixed income targets and ranges. The Committee has the
flexibility to reallocate each Portfolio's assets in varying
percentages among any or all of the Underlying Funds based on the
Committee's ongoing analyses of the equity and fixed income
markets, although these tactical shifts are not expected to be
large or frequent in nature.
"Fund of The term "fund of funds" is used to describe mutual funds, such as
Funds" the Portfolios, that pursue their investment objectives by
Structure investing in other mutual funds. The cost of investing in a
and Portfolio will generally be higher than the cost of investing in a
Expenses mutual fund that invests directly in individual stocks and bonds.
By investing in a Portfolio, an investor will indirectly bear fees
and expenses charged by the Underlying Funds in which the
Portfolio invests in addition to the Portfolio's direct fees and
expenses. In addition, the use of a fund of funds structure could
affect the timing, amount and character of distibutions to
shareholders and therefore may increase the amount of taxes
payable by shareholders.
Portfolio
Descriptions
and Fees
The following Portfolio Summaries identify each Portfolio's
investment objective, principal investments and strategies,
principal risks and fees and expenses. A more detailed "Summary of
Principal Risks" describing principal risks of investing in the
Portfolios begins after the Portfolio Summaries. Because the
Portfolios have not been in operation for a full calendar year, no
performance information (e.g., a bar chart or average annual total
returns table) is included for the Portfolios. A fuller discussion
of the Portfolios' investment strategies and related information
is included under "Investment Objectives and Principal Investment
Strategies" in this Prospectus.
Prospectus 4
<PAGE>
90/10 Portfolio
<TABLE>
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
Principal Investment Objective Allocation Strategy Target Range
Investments Seeks long-term capital appreciation Underlying Stock Funds 90% 80%-100%
and
Strategies Underlying Bond Funds 10% 0%-20%
</TABLE>
Dividend Frequency
At least annually
The Portfolio seeks to achieve its investment objective by
normally investing approximately 90% (within a range of 80%--100%)
of its assets in Underlying Stock Funds and approximately 10%
(within a range of0%--20%) of its assets in Underlying Bond Funds.
The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers. Please see "Asset Allocation Strategies" on page
3 for a summary of how the Asset Allocation Committee allocates
and reallocates the Portfolio's assets among particular Underlying
Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a relatively
long time horizon who seeks long-term capital appreciation
potential and has a fairly high tolerance for risk and volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, an investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Derivatives Risk .Interest Rate Risk
.Issuer Risk .Foreign Investment .Credit Risk
.Value Securities Risk .High Yield Risk
Risk .Emerging Markets .Mortgage Risk
.Growth Securities Risk .Management Risk
Risk .Currency Risk
.Smaller Company .Focused Investment
Risk Risk
.Liquidity Risk .Leveraging Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
90/10 Portfolio (continued)
- --------------------------------------------------------------------------------
Performance The following shows summary performance information for the
Information Portfolio in a bar chart and an Average Annual Total Returns
table. The information provides some indication of the risks of
investing in the Portfolio by showing changes in its performance
from year to year and by showing how the Portfolio's average
annual returns compare with the returns of broad-based securities
market indices and an index of mutual funds. The bar chart, the
information to its right and the Average Annual Total Returns
table show performance of the Portfolio's Class A shares, which
are offered in a different prospectus. This is because the
Portfolio has not offered Institutional Class or Administrative
Class shares for a full calendar year. Although Class A,
Institutional Class and Administrative Class shares would have
similar returns (because all the Portfolio's shares represent
interests in the same portfolio of securities), Class A
performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and/or expenses paid by Class A shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class A shares in the Average Annual Total Returns table
reflect the impact of sales charges. For periods prior to the
inception of Institutional Class and Administrative Class shares
(2/26/99), the Average Annual Total Returns table also shows
estimated historical performance for those classes based on the
performance of the Portfolio's Class A shares. The Class A
performance has been adjusted to reflect that there are no sales
charges and lower distribution and/or service (12b-1) fees (if
any), administrative fees and other expenses paid by Institutional
Class and Administrative Class shares. Past performance is no
guarantee of future results.
Calendar Year Total Returns -- Class A
[Return in Bar Chart] Highest and Lowest Quarter
Returns (for periods shown
in the bar chart)
-----------------------------
Highest (4th Qtr. '99) 14.32%
-----------------------------
19.00% Lowest (3rd Qtr. '99) -3.86%
[CHART APPEARS HERE]
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (9/30/98)(/4/)
------------------------------------------------------------------------
Class A 12.50% 22.17%
------------------------------------------------------------------------
Institutional Class 19.80% 28.62%
------------------------------------------------------------------------
Administrative Class 19.54% 28.33%
------------------------------------------------------------------------
Russell 3000 Index(/1/) 20.89% 35.92%
------------------------------------------------------------------------
Blended Index(/2/) 20.54% 33.44%
------------------------------------------------------------------------
Lipper Growth Fund Average(/3/) 29.25% 44.73%
------------------------------------------------------------------------
</TABLE>
(1) The Russell 3000 Index is an unmanaged index of the 3,000
largest U.S. companies based on total market capitalization.
It is not possible to invest directly in the index.
(2) The Blended Index represents the blended performance of a
hypothetical index made up of 72% Russell 3000 Index, 18%
MSCI All Country World ex-U.S. Index and 10% Lehman Brothers
Aggregate Bond Index. The Russell 3000 Index is described
above. The MSCI All Country World ex-U.S. Index is an
unmanaged index of stocks representing both developed and
emerging markets but excluding the United States. The Lehman
Brothers Aggregate Bond Index is an unmanaged index of
investment grade, U.S. dollar-denominated fixed income
securities of domestic issuers having a maturity greater than
one year. It is not possible to invest directly in these
indices.
(3) 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 indices. It does not
take into account sales charges.
(4) The Fund began operations on 9/30/98. Index comparisons begin
on 9/30/98.
Prospectus 6
<PAGE>
90/10 Portfolio (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Portfolio:
Portfolio
Shareholder Fees (fees paid directly from your investment)
None
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees Fees(/1/) Fund Expenses(/2/) Expenses(/1/)
------------------------------------------------------------------------------------------
Institutional None None 0.15% 0.76% 0.91%
------------------------------------------------------------------------------------------
Administrative None 0.25% 0.15 0.76 1.16
------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrative Fees for the Portfolio do not reflect a
voluntary fee waiver of 0.05% currently in effect. While the
fee waiver is in effect, actual Administrative Fees will be
0.10%, and Total Annual Portfolio Operating Expenses are
estimated to be as follows: Institutional Class - 0.86%;
Administrative Class - 1.11%.
(2) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Institutional Class or Administrative Class shares
of the Portfolio with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
Institutional $ 93 $290 $504 $1,120
-----------------------------------------------------------------------------------
Administrative 118 368 638 1,409
-----------------------------------------------------------------------------------
</TABLE>
Taking into account the Administrative Fees waiver described in
footnote (1) above, the Examples for Years 1, 3, 5 and 10,
respectively, are as follows: Institutional Class -- $88, $274,
$477 and $1,061; Administrative Class -- $113, $353, $612 and
$1,352.
7 PIMCO Funds: Multi-Manager Series
<PAGE>
60/40 Portfolio
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investment Objective Allocation Strategy Target Range
Investments Seeks long-term capital appreciation Underlying Stock Funds 60% 50%-70%
and and current income Underlying Bond Funds 40% 30%-50%
Strategies
</TABLE>
Dividend Frequency
Quarterly
The Portfolio seeks to achieve its investment objective by
normally investing approximately 60% (within a range of 50%--70%)
of its assets in Underlying Stock Funds and approximately 40%
(within a range of 30%--50%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers. Please see "Asset Allocation Strategies" on page
3 for a summary of how the Asset Allocation Committee allocates
and reallocates the Portfolio's assets among particular Underlying
Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a medium-range
time horizon who seeks a balance of long-term capital appreciation
potential and income and has a medium tolerance for risk and
volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, an investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
. Market Risk . Credit Risk . Emerging Markets
. Issuer Risk . High Yield Risk Risk
. Value Securities . Mortgage Risk . Currency Risk
Risk . Liquidity Risk . Focused Investment
. Growth Securities . Derivatives Risk Risk
Risk . Foreign Investment Risk . Leveraging Risk
. Smaller Company Risk . Management Risk
. Interest Rate Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
Prospectus 8
<PAGE>
60/40 Portfolio (continued)
- --------------------------------------------------------------------------------
Performance The following shows summary performance information for the
Information Portfolio in a bar chart and an Average Annual Total Returns
table. The information provides some indication of the risks of
investing in the Portfolio by showing changes in its performance
from year to year and by showing how the Portfolio's average
annual returns compare with the returns of broad-based securities
market indices and an index of mutual funds. The bar chart, the
information to its right and the Average Annual Total Returns
table show performance of the Portfolio's Class A shares, which
are offered in a different prospectus. This is because the
Portfolio has not offered Institutional Class or Administrative
Class shares for a full calendar year. Although Class A,
Institutional Class and Administrative Class shares would have
similar returns (because all the Portfolio's shares represent
interests in the same portfolio of securities), Class A
performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and/or expenses paid by Class A shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class A shares in the Average Annual Total Returns table
reflect the impact of sales charges. For periods prior to the
inception of Institutional Class and Administrative Class shares
(2/26/99), the Average Annual Total Returns table also shows
estimated historical performance for those classes based on the
performance of the Portfolio's Class A shares. The Class A
performance has been adjusted to reflect that there are no sales
charges and lower distribution and/or service (12b-1) fees (if
any), administrative fees and other expenses paid by Institutional
Class and Administrative Class shares. Past performance is no
guarantee of future results.
Calendar Year Total Returns -- Class A
[Return in Bar Chart] Highest and Lowest Quarter Returns
12.03% (for periods shown in the bar chart)
------------------------------------
Highest (4th Qtr.'99) 9.40%
------------------------------------
Lowest (3rd Qtr. '990 -2.40%
[CHART APPEARS HERE]
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (9/30/98)(/5/)
--------------------------------------------------------------------
Class A 5.87% 13.02%
--------------------------------------------------------------------
Institutional Class 12.71% 18.92%
--------------------------------------------------------------------
Administrative Class 12.43% 18.62%
--------------------------------------------------------------------
Russell 3000 Index(/1/) 20.89% 35.92%
--------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(/2/) -0.82% -0.39%
--------------------------------------------------------------------
Blended Index(/3/) 13.12% 21.30%
--------------------------------------------------------------------
Lipper Balanced Fund Average(/4/) 8.79% 16.57%
--------------------------------------------------------------------
</TABLE>
(1) The Russell 3000 Index is an unmanaged index of the 3,000
largest U.S. companies based on total market capitalization.
It is not possible to invest directly in the index.
(2) The Lehman Brothers Aggregate Bond Index is an unmanaged
index of investment grade, U.S. dollar-denominated fixed
income securities of domestic issuers having a maturity
greater than one year. It is not possible to invest directly
in the index.
(3) The Blended Index represents the blended performance of a
hypothetical index made up of 48% Russell 3000 Index, 12%
MSCI All Country World ex-U.S. Index and 40% Lehman Brothers
Aggregate Bond Index. The Russell 3000 Index and Lehman
Brothers Aggregate Bond Index are described above. The MSCI
All Country World ex-U.S. Index is an unmanaged index of
stocks representing both developed and emerging markets but
excluding the United States. It is not possible to invest
directly in these indices.
(4) The Lipper Balanced Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. whose primary objective is to conserve
principal by maintaining at all times a balanced portfolio of
both stocks and bonds. It does not take into account sales
charges.
(5) The Fund began operations on 9/30/98. Index comparisons begin
on 9/30/98.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
60/40 Portfolio (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Portfolio:
Portfolio
Shareholder Fees (fees paid directly from your investment)
None
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees Fees(/1/) Fund Expenses(/2/) Expenses(/1/)
------------------------------------------------------------------------------------------
Institutional None None 0.15% 0.65% 0.80%
------------------------------------------------------------------------------------------
Administrative None 0.25% 0.15 0.65 1.05
------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrative Fees for the Portfolio do not reflect a
voluntary fee waiver of 0.05% currently in effect. While the
fee waiver is in effect, actual Administrative Fees will be
0.10%, and Total Annual Portfolio Operating Expenses are
estimated to be as follows: Institutional Class - 0.75%;
Administrative Class - 1.00%.
(2) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated
based upon a recent allocation of the Portfolio's assets
among Underlying Funds and upon the total annual operating
expenses of Institutional Class shares of these Underlying
Funds. For a listing of the expenses associated with each
Underlying Fund, please see "Management of the Portfolios--
Underlying Fund Expenses." Total Annual Portfolio Operating
Expenses and the Examples set forth below are based on
estimates of the Underlying Fund Expenses the Portfolio will
incur. Actual Underlying Fund Expenses for the Portfolio are
expected to vary with changes in the allocation of the
Portfolio's assets, and may be higher or lower than those
shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Institutional Class or Administrative Class shares
of the Portfolio with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
Institutional $ 82 $255 $444 $ 990
-----------------------------------------------------------------------------------
Administrative 107 334 579 1,283
-----------------------------------------------------------------------------------
</TABLE>
Taking into account the Administrative Fees waiver described in
footnote (1) above, the Examples for Years 1, 3, 5 and 10,
respectively, are as follows: Institutional Class -- $77, $240,
$417 and $930; Administrative Class -- $102, $318, $552 and
$1,225.
Prospectus 10
<PAGE>
30/70 Portfolio
- --------------------------------------------------------------------------------
Principal Investment Allocation Target Range
Investments Objective Strategy
and Seeks current Underlying Stock
Strategies income, with Funds 30% 25%-35%
long-term Underlying Bond
capital Funds 70% 65%-75%
appreciation as
a secondary
objective
Dividend Frequency
Monthly
The Portfolio seeks to achieve its investment objective by
normally investing approximately 30% (within a range of 25%--35%)
of its assets in Underlying Stock Funds and approximately 70%
(within a range of 65%--75%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers. Please see "Asset Allocation Strategies" on page
3 for a summary of how the Asset Allocation Committee allocates
and reallocates the Portfolio's assets among particular Underlying
Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a shorter time
horizon who seeks a higher level of income combined with some
potential for long-term capital appreciation and has a lower
tolerance for risk and volatility.
- --------------------------------------------------------------------------------
Principal
Risks Allocation Risk The Portfolio's investment performance depends
upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, an investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
. Interest Rate Risk . Value Securities . Emerging Markets
. Credit Risk Risk Risk
. High Yield Risk . Growth Securities . Currency Risk
. Mortgage Risk Risk . Focused Investment
. Market Risk . Smaller Company Risk
. Issuer Risk Risk . Leveraging Risk
. Liquidity Risk . Management Risk
. Derivatives Risk
. Foreign Investment
Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
11 PIMCO Funds: Multi-Manager Series
<PAGE>
30/70 Portfolio (continued)
- --------------------------------------------------------------------------------
Performance The following shows summary performance information for the
Information Portfolio in a bar chart and an Average Annual Total Returns
table. The information provides some indication of the risks of
investing in the Portfolio by showing changes in its performance
from year to year and by showing how the Portfolio's average
annual returns compare with the returns of broad-based securities
market indices and an index of mutual funds. The bar chart, the
information to its right and the Average Annual Total Returns
table show performance of the Portfolio's Class A shares, which
are offered in a different prospectus. This is because the
Portfolio has not offered Institutional Class or Administrative
Class shares for a full calendar year. Although Class A,
Institutional Class and Administrative Class shares would have
similar returns (because all the Portfolio's shares represent
interests in the same portfolio of securities), Class A
performance would be lower than Institutional Class or
Administrative Class performance because of the higher sales
charges and/or expenses paid by Class A shares. The returns in the
bar chart and the information to its right do not reflect the
impact of sales charges (loads). If they did, the returns would be
lower than those shown. Unlike the bar chart, performance figures
for Class A shares in the Average Annual Total Returns table
reflect the impact of sales charges. For periods prior to the
inception of Institutional Class and Administrative Class shares
(2/26/99), the Average Annual Total Returns table also shows
estimated historical performance for those classes based on the
performance of the Portfolio's Class A shares. The Class A
performance has been adjusted to reflect that there are no sales
charges and lower distribution and/or service (12b-1) fees (if
any), administrative fees and other expenses paid by Institutional
Class and Administrative Class shares. Past performance is no
guarantee of future results.
Calendar Year Total Returns -- Class A
[Return in Bar Chart] Highest and Lowest
4.64% Quarter Returns
(for periods shown
in the bar chart)
--------------------
Highest (4th Qtr.
'99) 4.74%
--------------------
Lowest (1st Qtr.
'99) -1.43%
[CHART APPEARS HERE]
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Fund Inception
1 Year (9/30/98)(/4/)
-------------------------------------------------------------------
Class A -0.07% 4.73%
-------------------------------------------------------------------
Institutional Class 5.18% 9.22%
-------------------------------------------------------------------
Administrative Class 4.92% 8.94%
-------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(/1/) -0.82% -0.39%
-------------------------------------------------------------------
Blended Index(/2/) 6.00% 10.04%
-------------------------------------------------------------------
Lipper General Bond Fund Average(/3/) 1.17% 2.88%
-------------------------------------------------------------------
</TABLE>
(1) The Lehman Brothers Aggregate Bond Index is an unmanaged index
of investment grade, U.S. dollar-denominated fixed income
securities of domestic issuers having a maturity greater than
one year. It is not possible to invest directly in the index.
(2) The Blended Index represents the blended performance of a
hypothetical index made up of 24% Russell 3000 Index, 6% MSCI
All Country World ex-U.S. Index and 70% Lehman Brothers
Aggregate Bond Index. The Russell 3000 Index is an unmanaged
index of the 3,000 largest U.S. companies based on total
market capitalization. The MSCI All Country World ex-U.S.
Index is an unmanaged index of stocks representing both
developed and emerging markets but excluding the United
States. The Lehman Brothers Aggregate Bond Index is described
above. It is not possible to invest directly in these indices.
(3) The Lipper General Bond Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that intend to keep most of their assets in
corporate and government debt issues and do not have any
quality or maturity restrictions. It does not take into
account sales charges.
(4) The Fund began operations on 9/30/98. Index comparisons begin
on 9/30/98.
Prospectus 12
<PAGE>
30/70 Portfolio (continued)
- --------------------------------------------------------------------------------
Fees and These tables describe the fees and expenses you may pay if you buy
Expenses and hold Institutional Class or Administrative Class shares of the
of the Portfolio:
Portfolio
Shareholder Fees (fees paid directly from your investment)
None
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees Fees(/1/) Fund Expenses(/2/) Expenses(/1/)
------------------------------------------------------------------------------------------
Institutional None None 0.15% 0.55% 0.70%
------------------------------------------------------------------------------------------
Administrative None 0.25% 0.15 0.55 0.95
------------------------------------------------------------------------------------------
</TABLE>
(1) The Administrative Fees for the Portfolio do not reflect a
voluntary fee waiver of 0.05% currently in effect. While the
fee waiver is in effect, actual Administrative Fees will be
0.10%, and Total Annual Portfolio Operating Expenses are
estimated to be as follows: Institutional Class - 0.65%;
Administrative Class - 0.90%.
(2) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated
based upon a recent allocation of the Portfolio's assets
among Underlying Funds and upon the total annual operating
expenses of Institutional Class shares of these Underlying
Funds. For a listing of the expenses associated with each
Underlying Fund, please see "Management of the Portfolios--
Underlying Fund Expenses." Total Annual Portfolio Operating
Expenses and the Examples set forth below are based on
estimates of the Underlying Fund Expenses the Portfolio will
incur. Actual Underlying Fund Expenses for the Portfolio are
expected to vary with changes in the allocation of the
Portfolio's assets, and may be higher or lower than those
shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Institutional Class or Administrative Class shares
of the Portfolio with the costs of investing in other mutual
funds. The Examples assume that you invest $10,000 in the noted
class of shares for the time periods indicated, and then redeem
all your shares at the end of those periods. The Examples also
assume that your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<S> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------
Institutional $72 $224 $390 $ 871
-----------------------------------------------------------------------------------
Administrative 97 303 525 1,166
-----------------------------------------------------------------------------------
</TABLE>
Taking into account the Administrative Fees waiver described in
footnote (1) above, the Examples for Years 1, 3, 5 and 10,
respectively, are as follows: Institutional Class -- $66, $208,
$362 and $810; Administrative Class -- $92, $287, $498 and $1,108.
13PIMCO Funds: Multi-Manager Series
<PAGE>
Summary of Principal Risks
The value of an investment in a Portfolio changes with the values
of that Portfolio's investments in the Underlying Funds. Many
factors can affect those values. The factors that are most likely
to have a material effect on a particular Portfolio's investments
as a whole are called "principal risks." The principal risks of
each Portfolio are identified in the Portfolio Summaries beginning
on page 5 and are summarized in this section. There is no
guarantee that a Portfolio will be able to achieve its investment
objective.
Allocation Risk
Each Portfolio's investment performance depends upon how its
assets are allocated and reallocated among particular Underlying
Funds according to the Portfolio's equity/fixed income allocation
targets and ranges. A principal risk of investing in each
Portfolio is that PIMCO Advisors' Asset Allocation Committee will
make less than optimal or poor asset allocation decisions. The
Committee attempts to identify asset classes and sub-classes
represented by the Underlying Funds that will provide consistent,
quality performance for the Portfolios, but there is no guarantee
that the Committee's allocation techniques will produce the
desired results. It is possible that the Committee will focus on
Underlying Funds that perform poorly or underperform other
available Funds under various market conditions. You could lose
money on your investment in a Portfolio as a result of these
allocation decisions.
Underlying Fund Risks
Because each Portfolio invests all of its assets in Underlying
Funds, the risks associated with investing in the Portfolios are
closely related to the risks associated with the securities and
other investments held by the Underlying Funds. The ability of a
Portfolio to achieve its investment objective will depend upon the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved.
Each Portfolio's net asset value will fluctuate in response to
changes in the net asset values of the Underlying Funds in which
it invests. The extent to which the investment performance and
risks associated with a particular Portfolio correlate to those of
a particular Underlying Fund will depend upon the extent to which
the Portfolio's assets are allocated from time to time for
investment in the Underlying Fund, which will vary. A Portfolio's
investment in a particular Underlying Fund may and in some cases
is expected to exceed 25% of its assets. To the extent that a
Portfolio invests a significant portion of its assets in an
Underlying Fund, it will be particularly sensitive to the risks
associated with that Fund.
The following summarizes principal risks associated with
investments in the Underlying Funds and, indirectly, with your
investment in a Portfolio. Each Underlying Fund may be subject to
additional principal risks other than those described below
because the types of investments made by an Underlying Fund can
change over time. The summary is not intended to be exhaustive.
For a more complete description of these risks and the securities
and investment techniques used by the Underlying Funds, please
refer to the Statement of Additional Information and the
Underlying Fund prospectuses, which are incorporated herein by
reference and are available free of charge by telephoning the
Trust at 1-800-927-4648.
Market The market price of securities owned by an Underlying Fund may go
Risk up or down, sometimes rapidly or unpredictably. Securities may
decline in value due to factors affecting securities markets
generally or particular industries represented in the securities
markets. The value of a security may decline due to general market
conditions which are not specifically related to a particular
company, such as real or perceived adverse economic conditions,
changes in the general outlook for corporate earnings, changes in
interest or currency rates, or adverse investor sentiment
generally. They may also decline due to factors which affect a
particular industry or industries, such as labor shortages or
increased production costs and competitive conditions within an
industry. Equity securities generally have greater price
volatility than fixed income securities and the Underlying Stock
Funds are particularly sensitive to these market risks.
Issuer
Risk
The value of a security may also decline for a number of reasons
which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
Prospectus 14
<PAGE>
Value Each Underlying Stock Fund may invest in companies that may not be
Securities expected to experience significant earnings growth, but whose
Risk securities the Fund's portfolio manager believes are selling at a
price lower than their true value. PIMCO Equity Income,
Renaissance, Value, Small-Cap Value, Capital Appreciation, Mid-
Cap, Small-Cap and Micro-Cap Funds place particular emphasis on
value securities. Companies that issue value securities may have
experienced adverse business developments or may be subject to
special risks that have caused their securities to be out of
favor. If a portfolio manager's assessment of a company's
prospects is wrong, or if the market does not recognize the value
of the company, the price of its securities may decline or may not
approach the value that the portfolio manager anticipates.
Growth Each Underlying Stock Fund may invest in equity securities of
Securities companies that its portfolio manager believes will experience
Risk relatively rapid earnings growth. PIMCO Growth, Target,
Opportunity, Capital Appreciation, Mid-Cap, Small-Cap, Micro-Cap,
International Growth and Innovation Funds place particular
emphasis on growth securities. Growth securities typically trade
at higher multiples of current earnings than other securities.
Therefore, the values of growth securities may be more sensitive
to changes in current or expected earnings than the values of
other securities.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk market capitalizations that are small compared to other publicly
traded companies. These companies may have limited product lines,
markets or financial resources or they may depend on a few key
employees. Securities of smaller companies may trade less
frequently and in lesser volume than more widely held securities
and their values may fluctuate more sharply than other securities.
They may also trade in the over-the-counter market or on a
regional exchange, or may otherwise have limited liquidity. PIMCO
Opportunity, Small-Cap, Micro-Cap, Small-Cap Value and Innovation
Funds generally have substantial exposure to this risk. PIMCO
Target 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. Smaller
company risk also applies to fixed income securities issued by
smaller companies and may affect certain investments of the
Underlying Bond Funds.
Liquidity
Risk Many of the Underlying Funds are subject to liquidity risk.
Liquidity risk exists when particular investments are difficult to
purchase or sell, possibly preventing a Fund from selling out of
these illiquid securities at an advantageous time or price.
Underlying Funds with principal investment strategies that involve
securities of companies with smaller market capitalizations,
foreign securities, derivatives or securities with substantial
market and/or credit risk tend to have the greatest exposure to
liquidity risk.
Derivatives Many of the Underlying Funds may, but are not required to, use a
Risk number of derivative instruments for risk management purposes or
as part of their investment strategies. Generally, derivatives are
financial contracts whose value depends upon, or is derived from,
the value of an underlying asset, reference rate or index, and may
relate to stocks, bonds, interest rates, currencies or currency
exchange rates, commodities, and related indexes. Examples of
derivative instruments include options contracts, futures
contracts, options on futures contracts and swap agreements. An
Underlying Fund's use of derivative instruments involves risks
different from, or possibly greater than, the risks associated
with investing directly in securities and other traditional
investments. Also, an Underlying Fund's portfolio manager may
decide not to employ any of these strategies and there is no
assurance that any derivatives strategy used by a Fund will
succeed.
A description of the various derivative instruments in which the
Underlying Funds may invest and the risks associated with each
instrument is included in the Underlying Fund prospectuses and in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Underlying Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
15PIMCO Funds: Multi-Manager Series
<PAGE>
Liquidity Risk Liquidity risk exists when a particular
derivative instrument is difficult to purchase or sell. If a
derivative transaction is particularly large or if the relevant
market is illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When an Underlying Fund uses
derivatives for leverage, investments in that Fund will tend to be
more volatile, resulting in larger gains or losses in response to
market changes. To limit leveraging risk, the Underlying Funds
observe asset segregation requirements to cover their obligations
under derivative instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that an
Underlying Fund will engage in derivatives transactions at any
time or from time to time. A Fund's ability to use derivatives may
also be limited by certain regulatory considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the general risk that the market value
of the instrument will change in a way detrimental to an
Underlying Fund's interest. If a portfolio manager incorrectly
forecasts the values of securities, currencies or interest rates
or other economic factors in using derivatives for an Underlying
Fund, the Fund might have been in a better position if it had not
entered into the transaction at all. While some strategies
involving derivative instruments can reduce the risk of loss, they
can also reduce the opportunity for gain or even result in losses
by offsetting favorable price movements in other investments of an
Underlying Fund. An Underlying Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to an Underlying Fund. Also, the
value of derivatives may not correlate perfectly, or at all, with
the value of the assets, reference rates or indexes they are
designed to closely track. In addition, an Underlying Fund's use
of derivatives may also cause the Fund to realize higher amounts
of short-term capital gains (taxed at ordinary income tax rates
when distributed to shareholders who are individuals) than if the
Fund had not used such instruments.
Foreign Many Underlying Funds (in particular, PIMCO International,
(non- International Growth, Structured Emerging Markets, Tax-Efficient
U.S.) Structured Emerging Markets, Global Bond, Foreign Bond and
Investment Emerging Markets Bond Funds) invest in securities of foreign
Risk issuers, securities traded principally in securities markets
outside the United States and/or securities denominated in foreign
currencies (together, "foreign securities"). These Funds may
experience more rapid and extreme changes in value than Funds that
invest exclusively in securities of U.S. issuers or securities
that trade exclusively in U.S. markets.
The securities markets of many foreign countries are relatively
small, with a limited number of companies representing a small
number of industries. Foreign securities often trade with less
frequency and volume than domestic securities and therefore may
exhibit greater price volatility. Additionally, issuers of foreign
securities are usually not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting and auditing
standards of foreign countries differ, in some cases
significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely
affect an Underlying Fund's investments in a foreign country. In
the event of nationalization, expropriation or other confiscation,
a Fund could lose its entire investment in foreign securities. To
the extent that an Underlying Fund invests a significant portion
of its assets in a narrowly defined geographic area such as
Eastern Europe, South Africa or Asia, the Fund will generally have
more exposure to regional economic risks associated with foreign
investments. Adverse conditions in certain regions (such as
Southeast Asia) can also adversely affect securities of other
countries whose economies appear to be unrelated. In addition,
special U.S. tax considerations may apply to an Underlying Fund's
investment in foreign securities.
Prospectus 16
<PAGE>
Certain Underlying Bond Funds may invest in sovereign debt
issued by governments, their agencies or instrumentalities, or
other government-related entities. Holders of sovereign debt may
be requested to participate in the rescheduling of such debt and
to extend further loans to governmental entities. In addition,
there is no bankruptcy proceeding by which defaulted sovereign
debt may be collected.
Emerging Certain Underlying Funds (in particular, PIMCO Structured Emerging
Markets Markets, Tax-Efficient Structured Emerging Markets and Emerging
Risk Markets Bond Funds) may invest in the securities of issuers based
in countries with developing or "emerging market" economies. These
securities may present market, credit, currency, liquidity, legal,
political and other risks different from, or greater than, the
risks of investing in developed foreign countries.
Currency Many Underlying Funds may invest directly in foreign currencies or
Risk in securities that trade in, or receive revenues in, foreign
currencies. To the extent that they do so, these Funds are subject
to the risk that those currencies will decline in value relative
to the U.S. dollar, or, in the case of hedging positions, that the
U.S. Dollar will decline in value relative to the currency being
hedged. PIMCO Global Bond, Foreign Bond, Emerging Markets Bond,
International, International Growth, Structured Emerging Markets
and Tax-Efficient Structured Emerging Markets Funds are
particularly sensitive to currency risk. Currency rates in foreign
countries may fluctuate significantly over short periods of time
for a number of reasons, including changes in interest rates,
intervention (or the failure to intervene) by U.S. or foreign
governments, central banks or supranational entities such as the
International Monetary Fund, or by the imposition of currency
controls or other political developments in the U.S. or abroad.
For example, significant uncertainty surrounds the introduction of
the euro (a common currency unit for the European Union) in
January 1999 and its effect on the value of securities denominated
in local European currencies. These and other currencies in which
Underlying Fund assets are denominated may be devalued against the
U.S. dollar, resulting in a loss to such Funds.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies increases risk. PIMCO Global Bond, Foreign
Risk Bond and Emerging Markets Bond Funds are "non-diversified," which
means that they invest in a smaller number of issuers than
diversified mutual funds. Other Underlying Funds also normally
invest in a relatively small number of issuers. In addition, many
Underlying Bond Funds may invest a substantial portion of their
assets in the bonds of similar projects or from issuers in the
same state. To the extent that they focus their investments, the
Underlying Funds may have more risk because changes in the value
of a single security or the impact of a single economic, political
or regulatory occurrence may have a greater adverse impact on the
Underlying Fund's net asset value. Some of those investments also
may present substantial credit or other risks. PIMCO
International, International Growth, Structured Emerging Markets,
Tax-Efficient Structured Emerging Markets, Global Bond, Foreign
Bond and Emerging Markets Bond Funds may be subject to increased
risk to the extent they focus their assets in securities
denominated in a particular foreign currency or in a narrowly
defined geographic area outside the U.S. Similarly, PIMCO
Innovation Fund is vulnerable to events affecting companies which
use innovative technologies to gain a strategic, competitive
advantage in their industry and companies that provide and service
those technologies because it normally concentrates its
investments in those companies. Also, the Underlying Funds may
from time to time have greater risk because they invest a
substantial portion of their assets in related industries such as
"technology" or "financial and business services."
Although each Portfolio normally invests in a number of different
Underlying Funds, to the extent that a Portfolio concentrates a
significant portion of its assets in a single Underlying Fund, it
will be particularly sensitive to the risks associated with that
Fund and any investments in which that Fund concentrates.
Leveraging Certain Underlying Funds may engage in transactions or purchase
Risk instruments that give rise to forms of leverage. Such transactions
and instruments may include, among others, the use of reverse
repurchase agreements and other borrowings, the investment of
collateral from loans of portfolio securities, or the use of when-
issued, delayed-delivery or forward commitment transactions. An
Underlying Fund's use of derivatives may also involve leverage.
Leverage, including borrowing, will cause the value of an
Underlying Fund's shares to be more volatile that if the Fund did
not use leverage. This is because leverage tends to exaggerate the
effect of any increase or decrease in the value of a Fund's
portfolio securities. The use of leverage may also cause an
Underlying Fund to liquidate portfolio positions when it may not
be advantageous to do so in order to satisfy its obligations or to
meet segregation requirements.
17PIMCO Funds: Multi-Manager Series
<PAGE>
Interest All of the Underlying Funds that invest in fixed income
Rate Risk securities, and particularly the Underlying Bond Funds, are
subject to interest rate risk. Changes in the market values of
fixed income securities are largely a function of changes in the
current level of interest rates. The value of an Underlying Fund's
investments in fixed income securities will typically change as
the level of interest rates fluctuate. During periods of declining
interest rates, the value of fixed income securities generally
rise. Conversely, during periods of rising interest rates, the
value of fixed income securities generally decline.
"Duration" is one measure of the expected life of a fixed income
security that is used to determine the sensitivity of a security's
price to changes in interest rates. Securities with longer
durations tend to be more sensitive to changes in interest rates,
usually making them more volatile than securities with shorter
durations. Accordingly, Underlying Bond Funds with longer average
portfolio durations (e.g., PIMCO Long-Term U.S. Government Fund)
will be more sensitive to changes in interest rates than Funds
with shorter average portfolio durations (e.g., PIMCO Money
Market, Short-Term and Low Duration Funds). Also, some portfolios
(e.g., those with mortgage-backed and other prepayable securities)
have changing durations and may have increasing durations
precisely when that is least advantageous (i.e., when interest
rates are rising).
Many Underlying Funds, including most of the Underlying Bond
Funds, may invest in securities that are particularly sensitive to
fluctuations in prevailing interest rates and have relatively high
levels of interest rate risk. These include various mortgage-
related securities (for instance, the interest-only or "IO" class
of a stripped mortgage-backed security) and "zero coupon"
securities (fixed income securities, including certain U.S.
Government securities, that do not make periodic interest payments
and are purchased at a discount from their value at maturity).
Credit All of the Underlying Funds are subject to credit risk. This is
Risk the risk that the issuer or the guarantor of a fixed income
security, or the counterparty to a derivatives contract,
repurchase agreement or a loan of portfolio securities, will be
unable or unwilling to make timely principal and/or interest
payments, or to otherwise honor its obligations. Securities are
subject to varying degrees of credit risk, which are often
reflecting in credit ratings provided by rating agencies such as
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's
Ratings Services ("S&P").
The Underlying Funds that invest in fixed income securities
(particularly the Underlying Bond Funds) are subject to varying
degrees of risk that the issuers of the securities will have their
credit ratings downgraded or will default, potentially reducing
the Underlying Fund's share price and income level. Nearly all
fixed income securities are subject to some credit risk, whether
the issuers of the securities are corporations, states and local
governments or foreign governments. Even certain U.S. Government
securities are subject to credit risk.
High High yield securities (commonly known as "junk bonds") are fixed
Yield income securities rated lower than Baa by Moody's or BBB by S&P,
Risk or unrated securities determined to be of comparable quality.
Underlying Bond Funds which invest in high yield securities (in
particular, PIMCO High Yield and Emerging Markets Bond Funds) may
be subject to greater volatility and higher levels of credit,
liquidity and other risks than Funds that invest exclusively in
higher quality fixed income securities (e.g., PIMCO Money Market
and Long-Term U.S. Government Funds). High yield securities are
considered predominately speculative with respect to the issuer's
continuing ability to make principal and interest payments (credit
risk). High yield securities may also be more susceptible to real
or perceived adverse economic and competitive industry conditions
than higher quality fixed income securities. An economic downturn
or period of rising interest rates could adversely affect the
market for high yield securities and reduce an Underlying Bond
Fund's ability to sell its high yield securities (liquidity risk).
Mortgage Most of the Underlying Bond Funds may invest in mortgage-related
Risk securities. Rising interest rates tend to extend the duration of
mortgage-related securities, making them more sensitive to changes
in interest rates. As a result, in a period of rising interest
rates, an Underlying Fund that holds mortgage-related securities
may exhibit additional volatility. This is sometimes referred to
as extension risk. In addition, mortgage-related securities may
involve special risks relating to unanticipated rates of
prepayment on the mortgages underlying the securities. This is
sometimes referred to as prepayment risk. Declining interest rates
may tend to increase prepayments, and these prepayments would have
to be reinvested at the then-prevailing lower interest rates.
Therefore, an Underlying Fund that holds mortgage-related
securities may have less potential for capital appreciation during
periods of declining interest rates than Funds that invest in
other types of fixed income securities of similar maturities.
Prospectus 18
<PAGE>
Management Each Underlying Fund is subject to management risk because it is
Risk an actively managed investment portfolio. PIMCO Advisors, Pacific
Investment Management Company, and the sub-advisers and individual
portfolio managers of the Underlying Funds will apply investment
techniques and risk analyses in making investment decisions for
the Funds, but there can be no guarantee that they will produce
the desired results.
A Note on Each Portfolio may invest in PIMCO StocksPLUS Fund. While the
PIMCO investment objective of that Fund is to achieve a total return
StocksPLUS which exceeds the total return performance of the S&P 500 Index,
Fund it does so by investing substantially all of its assets in a
combination of equity-based (S&P 500 Index) derivative
instruments, backed by a portfolio of fixed income securities.
Consequently, the risks of investing in the Fund include
derivatives risk and the risks generally associated with the
Underlying Bond Funds. To the extent that the Fund invests in S&P
500 Index derivatives backed by a portfolio of fixed income
securities, under certain conditions, generally in a market where
the value of both S&P 500 Index derivatives and fixed income
securities are declining, the Fund may experience greater losses
than would be the case if it were to invest directly in a
portfolio of S&P 500 Index stocks.
19PIMCO Funds: Multi-Manager Series
<PAGE>
Investment Objectives and Principal Investment Strategies
The investment objective and principal investment strategies of
each Portfolio are described below. There can be no assurance that
the investment objective of any Portfolio will be achieved.
Because the market value of each Portfolio's investments will
change, the net asset value per share of each Portfolio will also
vary.
The Portfolios are intended for investors who prefer to have
their asset allocation decisions made by professional money
managers. Each Portfolio seeks to achieve its investment objective
by investing within specified equity and fixed income ranges among
the Underlying Funds. Each Underlying Fund is a series of the
Trust or PIMCO Funds: Pacific Investment Management Series and is
managed by PIMCO Advisors and/or its affiliates.
Portfolio 90/10 Portfolio seeks long-term capital appreciation. Under normal
Descriptionsconditions, approximately 90% of the Portfolio's assets will be
allocated among Underlying Stock Funds and 10% among Underlying
Bond Funds.
60/40 Portfolio seeks long-term capital appreciation and current
income. Under normal conditions, approximately 60% of the
Portfolio's assets will be allocated among Underlying Stock Funds
and 40% among Underlying Bond Funds.
30/70 Portfolio seeks current income. Long-term capital
appreciation is a secondary objective. Under normal conditions,
approximately 30% of the Portfolio's assets will be allocated
among Underlying Stock Funds and 70% among Underlying Bond Funds.
PIMCO Advisors serves as the investment adviser to the
Portfolios. PIMCO Advisors' Asset Allocation Committee determines
how each Portfolio allocates and reallocates its assets among the
Underlying Funds according to the Portfolio's equity/fixed income
allocation targets and ranges. Please see "Asset Allocation
Strategies" in the Summary Information section above for a
description of the allocation strategies and techniques used by
the Committee. The table below illustrates the equity and fixed
income allocation targets and typical ranges for each Portfolio
under normal market conditions.
Equity and Fixed Income Targets and Ranges
(as a percentage of each Portfolio's total investments)
<TABLE>
<CAPTION>
Typical
PIMCO Funds Target Allocation
Asset Allocation Series Allocation Range
--------------------------------------------------------
<S> <C> <C>
90/10 Portfolio
Equity--Underlying Stock Funds 90% 80% - 100%
Fixed Income--Underlying Bond Funds* 10% 0% - 20%
--------------------------------------------------------
60/40 Portfolio
Equity--Underlying Stock Funds 60% 50% - 70%
Fixed Income--Underlying Bond Funds* 40% 30% - 50%
--------------------------------------------------------
30/70 Portfolio
Equity--Underlying Stock Funds 30% 25% - 35%
Fixed Income--Underlying Bond Funds* 70% 65% - 75%
</TABLE>
* The Fixed Income portion may include a money market component
through investments in PIMCO Money Market Fund.
Each Portfolio invests all of its assets in Underlying Funds and
may invest in any or all of the Funds. However, it is expected
that a Portfolio will invest in only some of the Underlying Funds
at any particular time. A Portfolio's investment in a particular
Underlying Fund may exceed 25% of the Portfolio's total assets. To
the extent that a Portfolio invests a significant portion of its
assets in an Underlying Fund, it will be particularly sensitive to
the risks associated with that Fund. The particular Underlying
Funds in which each Portfolio may invest, the equity and fixed
income allocation targets and ranges specified above, and the
percentage of each Portfolio's assets invested from time to time
in any Underlying Fund or combination of Funds may be changed from
time to time without the approval of the Portfolio's shareholders.
Each Portfolio is also subject to certain investment restrictions
that are described under "Investment Restrictions" in the
Statement of Additional Information.
Prospectus 20
<PAGE>
Equity The equity portion of each Portfolio will be allocated among a
Portion number of Underlying Stock Funds which represent a broad range of
of the equity-based asset classes and sub-classes and a variety of
Portfolios investment objectives and strategies. By allocating assets among
these Funds, the equity portions of the Portfolios can be
diversified in multiple ways, including the following:
By Investment Style/Category
.Growth
.Blend (Broad Market)
.Value
.Enhanced Index
.Sector-Related
By Region
.U.S. Equities
.International Developed Markets Equities
.International Emerging Markets Equities
By Size
.Large-Cap
.Mid-Cap
.Small-Cap
For a description of the Underlying Stock Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Fixed The fixed income portion of each Portfolio will be allocated among
Income a number of Underlying Bond Funds which represent a broad range of
Portion fixed income-based asset classes and sub-classes and a variety of
of the investment objectives and strategies. By allocating assets among
Portfolios these Funds, the fixed income portions of the Portfolios can be
diversified in multiple ways, including the following:
By Sector/Investment Specialty
.Governments
.Mortgages
.Corporate
.Inflation-Indexed
By Region
.U.S. Fixed Income
.Developed Foreign Fixed Income
.Emerging Markets Fixed Income
By Credit Quality
.Investment Grade/Money Market
.Medium Grade
.High Yield
By Duration
.Long-Term
.Intermediate-Term
.Short-Term
For a description of the Underlying Bond Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Temporary In response to unfavorable market and other conditions, each
Defensive Portfolio may invest up to 100% of its assets in PIMCO Money
Strategies Market Fund (and may deviate from its asset allocation range) for
temporary defensive purposes. A Portfolio may also borrow money
for temporary or emergency purposes. These temporary strategies
would be inconsistent with the Portfolio's investment objective
and principal investment strategies and may adversely affect the
Portfolio's ability to achieve its investment objective.
21 PIMCO Funds: Multi-Manager Series
<PAGE>
Portfolio A change in the securities held by a Portfolio is known as
Turnover "portfolio turnover." Because PIMCO Advisors does not expect to
reallocate the Portfolios' assets among the Underlying Funds on a
frequent basis, the portfolio turnover rates for the Portfolios
are expected to be modest (i.e., less than 25%) in comparison to
most mutual funds. However, the Portfolios' indirectly bear the
expenses associated with portfolio turnover of the Underlying
Funds, a number of which have fairly high portfolio turnover rates
(i.e., in excess of 100%). High portfolio turnover involves
correspondingly greater expenses to an Underlying Fund, including
brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other
securities. Shareholders in the Portfolios may also bear expenses
directly or indirectly through sales of securities held by the
Portfolios and the Underlying Funds which result in realization of
taxable capital gains. To the extent such gains relate to
securities held for twelve months or less, such gains will be
short-term capital gains taxed at ordinary income tax rates when
distributed to shareholders who are individuals. The trading costs
and tax effects associated with portfolio turnover may adversely
affect a Portfolio's performance and the return to shareholders.
Changes The investment objective, the equity/fixed income allocation
in targets and ranges, and, unless otherwise noted, other investment
Investment policies of each Portfolio described in this Prospectus may be
Objectives changed by the Board of Trustees without shareholder approval. If
and there is a change in a Portfolio's investment objective,
Policies allocation target or range, or other investment policies,
shareholders should consider whether the Portfolio remains an
appropriate investment in light of their then current financial
positions and needs.
Prospectus 22
<PAGE>
Underlying Funds
Each Portfolio invests all of its assets in Underlying Funds.
Accordingly, each Portfolio's investment performance depends upon
a favorable allocation among the Underlying Funds as well as the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved. Shares of the Underlying Funds
are not offered in this Prospectus.
Advisory PIMCO Advisors serves as investment adviser for each of the
Arrangements Underlying Stock Funds, except that its affiliate, Pacific
for the Investment Management Company, is the sole investment adviser to
Underlying PIMCO StocksPLUS Fund. The PIMCO Equity Advisors division of PIMCO
Funds Advisors manages the investments of several of the Underlying
Stock Funds. PIMCO Advisors retains sub-advisory firms to manage
the portfolios of other Underlying Stock Funds. These firms
include Cadence Capital Management, NFJ Investment Group and
Parametric Portfolio Associates, each of which is an affiliate of
PIMCO Advisors, and Blairlogie Capital Management, which is not an
affiliate. Pacific Investment Management Company is the sole
investment adviser to each of the Underlying Bond Funds. For a
complete description of the advisory and sub-advisory arrangements
for the Underlying Funds, please see the Statement of Additional
Information and the Underlying Fund prospectuses, which are
incorporated herein by reference and are available free of charge
by telephoning the Trust at 1-800-927-4648.
Underlying The following provides a concise description of the investment
Stock objective, main investments and other information about each
Funds Underlying Stock Fund. For a complete description of these Funds,
please see the Underlying Fund prospectuses, which are
incorporated herein by reference and are available free of charge
by telephoning the Trust at 1-800-927-4648.
<TABLE>
<CAPTION>
Approximate
PIMCO Investment Main Number of
Fund Objective Investments Holdings
---------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Growth Stock Growth Long-term growth of Common stocks of 35-40
Funds capital; companies with market
income is an capitalizations of at
incidental least $5 billion
consideration
-------------------------------------------------------------------------------------
Target Capital appreciation; Common stocks of 40-60
no companies with market
consideration is capitalizations of
given to income between $1 billion and
$10 billion
-------------------------------------------------------------------------------------
Opportunity Capital appreciation; Common stocks of 60-100
no companies with market
consideration is capitalizations of
given to income between $100 million and
$2 billion
---------------------------------------------------------------------------------------------------
Blend Stock Capital Appreciation Growth of capital Common stocks of 60-100
Funds companies with market
capitalizations of at
least $1 billion that
have improving
fundamentals and whose
stock is reasonably
valued by the market
-------------------------------------------------------------------------------------
Mid-Cap Growth of capital Common stocks of 60-100
companies with market
capitalizations of more
than $500 million
(excluding the largest
200 companies) that have
improving fundamentals
and whose stock is
reasonably valued by the
market
-------------------------------------------------------------------------------------
Small-Cap Growth of capital Common stocks of 60-100
companies with market
capitalizations of more
than $100 million
(excluding the largest
1,000 companies) that
have improving
fundamentals and whose
stock is reasonably
valued by the market
-------------------------------------------------------------------------------------
Micro-Cap Long-term growth of Common stocks of 60-100
capital companies with market
capitalizations of less
than $250 million that
have improving
fundamentals and whose
stock is reasonably
valued by the market
</TABLE>
23PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Approximate
PIMCO Investment Main Number of
Fund Objective Investments Holdings
---------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Value Stock Equity Income Current income as a Income-producing common 40-50
Funds primary objective; stocks of companies with
long-term growth of market capitalizations
capital as a of more than $2 billion
secondary objective
-----------------------------------------------------------------------------------------
Renaissance Long-term growth of Common stocks of 50-80
capital and income companies with below-
average valuations whose
business fundamentals
are expected to improve
-----------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of 40
capital and income companies with market
capitalizations of more
than $2 billion that are
undervalued relative to
the market and their
industry groups
-----------------------------------------------------------------------------------------
Small-Cap Value Long-term growth of Common stocks of 100
capital and income companies with market
capitalizations of
between $100 million and
$1.5 billion and below-
average price-to-
earnings ratios relative
to the market and their
industry groups
---------------------------------------------------------------------------------------------------------
Enhanced Index Tax-Efficient Equity Maximum after-tax A broadly diversified More than
Stock Funds growth of capital portfolio of at least 200
200 common stocks of
companies represented in
the S&P 500 Index with
market capitalizations
of more than $5 billion
-----------------------------------------------------------------------------------------
Enhanced Equity A total return which Common stocks 100-200
equals or exceeds the represented in the S&P
total return 500 Index with market
performance of an capitalizations of more
index (currently the than $5 billion
S&P 500 Index) that
represents the
performance of a
reasonably broad
spectrum of common
stocks that are
publicly traded in
the U.S.
-----------------------------------------------------------------------------------------
StocksPLUS Total return that S&P 500 stock index N/A
exceeds that of the derivatives backed by a
S&P 500 Index portfolio of short-term
fixed income securities
---------------------------------------------------------------------------------------------------------
International International Capital appreciation Common stocks of foreign 200-250
Stock Funds through investment in (non-U.S.) issuers
an international (developed and emerging
portfolio; income is markets) with market
an incidental capitalizations of more
consideration than $500 million
-----------------------------------------------------------------------------------------
International Growth Long-term capital An international 50-100
appreciation portfolio of common
stocks
-----------------------------------------------------------------------------------------
Structured Emerging Long-term growth of Common stocks of More than
Markets capital companies located in, or 300
whose business relates
to, emerging markets
-----------------------------------------------------------------------------------------
Tax-Efficient Structured Long-term growth of Common stocks of More than
Emerging Markets capital. The Fund companies located in, or 300
also seeks to achieve whose business relates
superior after-tax to, emerging markets
returns for its
shareholders by using
a variety of tax-
efficient management
strategies
---------------------------------------------------------------------------------------------------------
Sector-Related Innovation Capital appreciation; Common stocks of 40
Stock Funds no consideration is technology-related
given to income companies with market
capitalizations of more
than $200 million
</TABLE>
Prospectus 24
<PAGE>
Underlying The investment objective of each Underlying Bond Fund (except as
Bond provided below) is to seek to realize maximum total return,
Funds consistent with preservation of capital and prudent investment
management. The "total return" sought by most of the Underlying
Bond Funds will consist of income earned on the Fund's
investments, plus capital appreciation, if any, which generally
arises from decreases in interest rates or improving credit
fundamentals for a particular sector or security. The investment
objective of PIMCO Real Return Bond Fund is to seek to realize
maximum real return, consistent with preservation of real capital
and prudent investment management. "Real return" is a measure of
the change in purchasing power of money invested in a particular
investment after adjusting for inflation. The investment objective
of each of PIMCO Money Market Fund and PIMCO Short-Term Fund is to
seek to obtain maximum current income, consistent with
preservation of capital and daily liquidity. PIMCO Money Market
Fund also attempts to maintain a stable net asset value of $1.00
per share, although there can be no assurance that it will be
successful in doing so.
The following provides a concise description of the main
investments of and other information relating to each Underlying
Bond Fund. For a complete description of these Funds, please see
the Underlying Fund prospectus for PIMCO Funds: Pacific Investment
Management Series, which is incorporated herein by reference and
is available free of charge by telephoning the Trust at 1-800-927-
4648.
<TABLE>
<CAPTION>
Non-U.S. Dollar
Denominated
PIMCO Fund Main Investments Duration Credit Quality(/1/) Securities(/2/)
--------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
Short Money Market Money market instruments less than or Min 95% Aaa or Prime 1; 0%
Duration Bond equal to less than or equal to
Funds 90 days 5% Aa or Prime 2
dollar-weighted
average maturity
------------------------------------------------------------------------------------------
Short-Term Money market instruments 0-1 yr B to Aaa; max 10% 0-5%
and below Baa
short maturity fixed
income
securities
------------------------------------------------------------------------------------------
Low Duration Short maturity fixed 1-3 yrs B to Aaa; max 10% 0-20%
income below Baa
securities
--------------------------------------------------------------------------------------------------------
Intermediate Moderate Duration Short and intermediate 2-5 yrs B to Aaa; max 10% 0-20%
Duration maturity below Baa
Bond Funds fixed income securities
------------------------------------------------------------------------------------------
Total Return Intermediate maturity 3-6 yrs B to Aaa; max 10% 0-20%
fixed income securities below Baa
------------------------------------------------------------------------------------------
Total Return II Intermediate maturity 3-6 yrs Baa to Aaa 0%
fixed
income securities with
quality
and foreign issuer
restrictions
--------------------------------------------------------------------------------------------------------
Long Duration Long-Term U.S. Long-term maturity fixed greater than A to Aaa 0%
Bond Funds Government income or equal to
securities 8 yrs
--------------------------------------------------------------------------------------------------------
International Global Bond U.S. and foreign 3-7 yrs B to Aaa; max 10% 25-75%
Bond Funds intermediate below Baa
maturity fixed income
securities
------------------------------------------------------------------------------------------
Foreign Bond Intermediate maturity 3-7 yrs B to Aaa; max 10% greater than
hedged below Baa or equal to
foreign fixed income 85%
securities
------------------------------------------------------------------------------------------
Emerging Markets Emerging market fixed 0-8 yrs B to Aaa greater than
Bond income or equal to
securities 80%
--------------------------------------------------------------------------------------------------------
High Yield High Yield Higher yielding fixed 2-6 yrs B to Aaa; min 65% 0%
Bond Funds income below Baa
securities
--------------------------------------------------------------------------------------------------------
Inflation Real Return Bond Inflation-indexed fixed N/A B to Aaa; max 10% 0-35%
Indexed Bond income below Baa
Funds securities
</TABLE>
1. As rated by Moody's Investors Service, Inc., or equivalently
rated by Standard & Poor's Ratings Services, or if unrated, de-
termined by Pacific Investment Management Company to be of compa-
rable quality.
2. Percentage limitations relate to non-U.S. dollar-denominated
securities for all Underlying Bond Funds except PIMCO Global
Bond, Foreign Bond and Emerging Markets Bond Funds. Percentage
limitations for these three Funds relate to securities of non-
U.S. issuers, denominated in any currency. Each Underlying Bond
Fund (except PIMCO Total Return II and Long-Term U.S. Government
Funds) may invest beyond these limits in U.S. dollar-denominated
securities of non-U.S. issuers.
Each Underlying Bond Fund invests at least 65% of its assets in
the following types of securities, which, unless provided above,
may be issued by domestic or foreign entities and denominated in
U.S. dollars or foreign currencies: securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities ("U.S. Government securities"); corporate debt
securities, including convertible securities and corporate
commercial paper; mortgage-backed and other asset-backed
securities; inflation-indexed bonds issued by both governments and
corporations; structured notes, including hybrid or "indexed"
securities, catastrophe bonds and loan participations; delayed
funding loans and revolving credit facilities; bank certificates
of deposit, fixed time deposits and bankers' acceptances;
repurchase agreements and reverse repurchase agreements; debt
securities issued by states or local governments and their
agencies, authorities and other instrumentalities; obligations of
foreign governments or their subdivisions, agencies and
instrumentalities; and obligations of international agencies or
supranational entities.
25PIMCO Funds: Multi-Manager Series
<PAGE>
Other In addition to purchasing the securities listed above under "Main
Investment Investments," some or all of the Underlying Funds may to varying
Practices extents: lend portfolio securities; enter into repurchase
of the agreements and reverse repurchase agreements; purchase and sell
Underlying securities on a when-issued or delayed delivery basis; enter into
Funds forward commitments to purchase securities; purchase and write
call and put options on securities and securities indexes; enter
into futures contracts, options on futures contracts and swap
agreements; invest in foreign securities; and buy or sell foreign
currencies and enter into forward foreign currency contracts.
These and the other types of securities and investment techniques
used by the Underlying Funds all have attendant risks. The
Portfolios are indirectly subject to some or all of these risks
to varying degrees because they invest all of their assets in the
Underlying Funds. For further information concerning the
investment practices of and risks associated with the Underlying
Funds, please see "Investment Objectives and Policies" in the
Statement of Additional Information and the Underlying Fund
prospectuses, which are incorporated herein by reference and are
available free of charge by telephoning the Trust at 1-800-927-
4648.
Additional
Underlying
Funds In addition to the Funds listed above, a Portfolio may invest in
additional Underlying Funds, including those that may become
available for investment in the future, at the discretion of
PIMCO Advisors and without shareholder approval.
Other Risk Information
Potential PIMCO Advisors has broad discretion to allocate and reallocate
Conflicts the Portfolios' assets among the Underlying Funds consistent with
of the Portfolios' investment objectives and policies and asset
Interest allocation targets and ranges. Although PIMCO Advisors does not
charge an investment advisory fee for its asset allocation
services, PIMCO Advisors and its affiliates indirectly receive
fees (including investment advisory and administrative fees) from
the Underlying Funds in which the Portfolios invest. In this
regard, PIMCO Advisors has a financial incentive to invest a
Portfolio's assets in Underlying Funds with higher fees than
other Funds, even if it believes that alternate investments would
better serve the Portfolio's investment program. PIMCO Advisors
is legally obligated to disregard that incentive in making asset
allocation decisions for the Portfolios. The Trustees and
officers of the Trust may also have conflicting interests in
fulfilling their fiduciary duties to both the Portfolios and the
Underlying Funds of the Trust.
Management of the Portfolios
Investment
Adviser
and
Administrator
PIMCO Advisors serves as the investment adviser and the
administrator (serving in its capacity as administrator, the
"Administrator") for the Portfolios. Subject to the supervision
of the Board of Trustees, PIMCO Advisors is responsible for
managing, either directly or through others selected by it, the
investment activities of the Portfolios and the Portfolios'
business affairs and other administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of December 31, 1999, PIMCO Advisors and its subsidiary
partnerships had more than $261 billion in assets under
management.
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Portfolios in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may
retain other affiliates to provide certain of these services.
Prospectus 26
<PAGE>
Asset PIMCO Advisors' Asset Allocation Committee is responsible for
Allocation determining how the Portfolios' assets are allocated and
Committee reallocated from time to time among the Underlying Funds. The
following provides information about the individuals who
comprise the Asset Allocation Committee and are primarily
responsible for making asset allocation and other investment
decisions for the Portfolios.
<TABLE>
<CAPTION>
Asset Allocation
Committee Member Since* Recent Professional Experience
---------------------------------------------------------------------------------------------
<S> <C>
William D. Cvengros 1998 Chief Executive Officer, President and a Member of the Management
Board of PIMCO Advisors. Previously, he was Chairman of the Board
of Trustees and President of the Trust. He was a Director and
the Vice Chairman and Chief Investment Officer of Pacific Life
Insurance Company from January 1990 to November 1994.
Timothy R. Clark 1998 Vice President of PIMCO Advisors and a Senior Vice President of
PIMCO Funds Distributors LLC. Previously, he was President of
Katonah Capital Management, Inc. from July 1995 to December 1996
and served in various capacities at Zweig Advisors Inc. from
September 1989 to July 1995.
Robert S. Venable 1998 Vice President of PIMCO Advisors. Previously, he was a Vice
President and portfolio manager at Pacific Investment Management
Company from August 1992 to August 1996.
David Young 1998 Vice President and an Account Manager at Pacific Investment
Management Company. He has served in various capacities with
Pacific Investment Management Company and its affiliates since
January 1994. Previously, he was a Vice President and portfolio
manager at Analytic Investment Management, Inc. from September 1988
to January 1994.
</TABLE>
* Each individual has served on the Committee since the inception
of each Portfolio in September 1998.
It is expected that, on or about May 8, 2000, Messrs. Cvengros
and Venable will be replaced as members of the Asset Allocation
Committee by Kenneth W. Corba and John S. Loftus. Mr. Corba is a
Managing Director and Chief Investment Officer of the PIMCO
Equity Advisors division of PIMCO Advisors, and a member of the
Management Board of PIMCO Advisors. Prior to joining PIMCO
Advisors, he was with Eagle Asset Management from 1995 to 1998,
serving in various capacities including as Chief Investment
Officer and Portfolio Manager. He was with Stein Roe & Farnham
Inc. from 1984 to 1995. Mr. Loftus is a Managing Director of
Pacific Investment Management Company, where he is a senior
member of its investment strategy group. Mr. Loftus also heads
the firm's product management area. Mr. Loftus joined Pacific
Investment Management Company in 1986.
Advisory The Portfolios do not pay any fees to PIMCO Advisors under the
Fees Trust's investment advisory agreement in return for the advisory
and asset allocation services provided by PIMCO Advisors. The
Portfolios do, however, indirectly pay their proportionate share
of the advisory fees paid to PIMCO Advisors and Pacific
Investment Management Company by the Underlying Funds in which
the Portfolios invest. See "Underlying Fund Expenses" below.
Administrative
Fees
Institutional Class and Administrative Class shareholders of
each Portfolio pay an administrative fee to PIMCO Advisors,
computed as a percentage of the Portfolio's assets attributable
in the aggregate to those classes of shares. PIMCO Advisors, in
turn, provides or procures administrative services for
Institutional Class and Administrative Class shareholders and
also bears the costs of various third-party services required by
the Portfolios, including audit, custodial, portfolio
accounting, legal, transfer agency and printing costs.
The Portfolios were not operational for the entire fiscal year
ended June 30, 1999. Each Portfolio is obligated to pay monthly
administrative fees to PIMCO Advisors at an annual rate of 0.15%
based on the average daily net assets attributable in the
aggregate to the Portfolio's Institutional Class and
Administrative Class shares. In order to reduce expenses, PIMCO
Advisors has voluntarily undertaken to waive a portion of the
administrative fees it is entitled to receive for Institutional
Class and Administrative Class shares of each Portfolio until
further notice. As a result, while the waiver is in effect, each
Portfolio will pay administrative fees to PIMCO Advisors at the
annual rate of 0.10%, calculated in the manner specified above.
The Portfolios also indirectly pay their proportionate share of
the administrative fees charged by PIMCO Advisors and Pacific
Investment Management Company to the Underlying Funds in which
the Portfolios invest. See "Underlying Fund Expenses" below.
Underlying
Fund
Expenses
The expenses associated with investing in a "fund of funds,"
such as the Portfolios, are generally higher than those for
mutual funds that do not invest primarily in other mutual funds.
This is because shareholders in a "fund of funds" indirectly pay
a portion of the fees and expenses charged at the underlying
fund level.
27 PIMCO Funds: Multi-Manager Series
<PAGE>
The Portfolios are structured in the following ways to lessen
the impact of expenses incurred at the Underlying Fund level:
. The Portfolios do not pay any fees for asset allocation or
advisory services under the Trust's investment advisory
agreement.
. The Underlying Funds invest in Institutional Class shares of
the Underlying Funds, which are not subject to any sales
charges or 12b-1 fees.
The following table summarizes the annual expenses borne by
Institutional Class shareholders of the Underlying Funds (based on
estimates for the current fiscal year). Because the Portfolios
invest in Institutional Class shares of the Underlying Funds,
shareholders of each Portfolio indirectly bear a proportionate
share of these expenses, depending upon how the Portfolio's assets
are allocated from time to time among the Underlying Funds. See
"Fees and Expenses of the Portfolio" in each Portfolio Summary
above.
<TABLE>
<CAPTION>
Annual Underlying Fund Expenses
(Based on the average daily net assets
attributable
to a Fund's Institutional Class shares):
Advisory Administrative Total Fund
Underlying Fund Fees Fees Operating Expenses
----------------------------------------------------------------
<S> <C> <C> <C>
PIMCO Growth 0.50% 0.25% 0.75%
----------------------------------------------------------------
PIMCO Target 0.55 0.25 0.80
----------------------------------------------------------------
PIMCO Opportunity 0.65 0.25 0.90
----------------------------------------------------------------
PIMCO Capital
Appreciation 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Mid-Cap 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Small-Cap 1.00 0.25 1.25
----------------------------------------------------------------
PIMCO Micro-Cap 1.25 0.25 1.50
----------------------------------------------------------------
PIMCO Equity Income 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Renaissance 0.60 0.25 0.85
----------------------------------------------------------------
PIMCO Value 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Small-Cap Value 0.60 0.25 0.85
----------------------------------------------------------------
PIMCO Tax-Efficient
Equity 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Enhanced Equity 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO StocksPLUS 0.40 0.25 0.65
----------------------------------------------------------------
PIMCO International 0.55 0.50 1.05
----------------------------------------------------------------
PIMCO International
Growth 0.85 0.50 1.35
----------------------------------------------------------------
PIMCO Structured Emerging
Markets 0.45 0.50 0.95
----------------------------------------------------------------
PIMCO Tax-Efficient
Structured Emerging
Markets 0.45 0.50 0.95
----------------------------------------------------------------
PIMCO Innovation 0.65 0.25 0.90
----------------------------------------------------------------
PIMCO Money Market 0.15 0.20 0.35
----------------------------------------------------------------
PIMCO Short-Term 0.25 0.20 0.45
----------------------------------------------------------------
PIMCO Low Duration 0.25 0.18 0.43
----------------------------------------------------------------
PIMCO Moderate Duration 0.25 0.20 0.45
----------------------------------------------------------------
PIMCO Total Return 0.25 0.18 0.43
----------------------------------------------------------------
PIMCO Total Return II 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Long-Term U.S.
Government 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Global Bond 0.25 0.30 0.55
----------------------------------------------------------------
PIMCO Foreign Bond 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Emerging Markets
Bond 0.45 0.40 0.85
----------------------------------------------------------------
PIMCO High Yield 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Real Return Bond 0.25 0.27 0.52
</TABLE>
Distributor
The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stamford, CT 06902, is a broker-dealer
registered with the Securities and Exchange Commission.
Prospectus 28
<PAGE>
Investment Options --
Institutional Class and Administrative Class Shares
The Trust offers investors Institutional Class and Administrative
Class shares of the Portfolios in this Prospectus.
The Trust does not charge any sales charges (loads) or other fees
in connection with purchases, sales (redemptions) or exchanges of
Institutional Class or Administrative Class shares. Administrative
Class shares are generally subject to a higher level of operating
expenses than Institutional Class shares due to the additional
service and/or distribution fees paid by Administrative Class
shares as described below. Therefore, Institutional Class shares
will generally pay higher dividends and have a more favorable
investment return than Administrative Class shares.
. Service and Distribution (12b-1) Fees--Administrative Class
Shares. The Trust has adopted an Administrative Services Plan and
a Distribution Plan for the Administrative Class shares of each
Portfolio. Each Plan has been adopted in accordance with the
requirements of Rule 12b-1 under the Investment Company Act of
1940 and is administered in accordance with that rule. However,
shareholders do not have the voting rights set forth in Rule 12b-1
with respect to the Administrative Services Plan.
Each Plan allows the Portfolios to use their Administrative Class
assets to reimburse financial intermediaries that provide services
relating to Administrative Class shares. The Distribution Plan
permits reimbursement for expenses in connection with the
distribution and marketing of Administrative Class shares and/or
the provision of shareholder services to Administrative Class
shareholders. The Administrative Services Plan permits
reimbursement for services in connection with the administration
of plans or programs that use Administrative Class shares of the
Portfolios as their funding medium and for related expenses.
In combination, the Plans permit a Portfolio to make total
reimbursements at an annual rate of up to 0.25% of the Portfolio's
average daily net assets attributable to its Administrative Class
shares. The same entity may not receive both distribution and
administrative services fees with respect to the same
Administrative Class assets, but may receive fees under each Plan
with respect to separate assets. Because these fees are paid out
of a Portfolio's Administrative Class assets on an ongoing basis,
over time they will increase the cost of an investment in
Administrative Class shares and may cost an investor more than
other types of sales charges.
. Arrangements with Service Agents. Institutional Class and
Administrative Class shares of the Portfolios may be offered
through certain brokers and financial intermediaries ("service
agents") that have established a shareholder servicing
relationship with the Trust on behalf of their customers. The
Trust pays no compensation to such entities other than service
and/or distribution fees paid with respect to Administrative Class
shares. Service agents may impose additional or different
conditions than the Trust on purchases, redemptions or exchanges
of Portfolio shares by their customers. Service agents may also
independently establish and charge their customers transaction
fees, account fees and other amounts in connection with purchases,
sales and redemptions of Portfolio shares in addition to any fees
charged by the Trust. These additional fees may vary over time and
would increase the cost of the customer's investment and lower
investment returns. Each service agent is responsible for
transmitting to its customers a schedule of any such fees and
information regarding any additional or different conditions
regarding purchases, redemptions and exchanges. Shareholders who
are customers of service agents should consult their service
agents for information regarding these fees and conditions.
29PIMCO Funds: Multi-Manager Series
<PAGE>
Purchases, Redemptions and Exchanges
Investors may purchase Institutional Class and Administrative
Purchasing Class shares of the Portfolios at the relevant net asset value
Shares ("NAV") of that class without a sales charge or other fee.
Institutional Class shares are offered primarily for direct
investment by investors such as pension and profit sharing plans,
employee benefit trusts, endowments, foundations, corporations and
high net worth individuals. Institutional Class shares may also be
offered through certain financial intermediaries that charge their
customers transaction or other fees with respect to their
customers' investments in the Portfolios.
Administrative Class shares are offered primarily through
employee benefit plan alliances, broker-dealers and other
intermediaries, and each Portfolio pays service and/or
distribution fees to these entities for services they provide to
Administrative Class shareholders.
Pension and profit-sharing plans, employee benefit trusts and
employee benefit plan alliances and "wrap account" programs
established with broker-dealers or financial intermediaries may
purchase shares of either class only if the plan or program for
which the shares are being acquired will maintain an omnibus or
pooled account for each Portfolio and will not require a Portfolio
to pay any type of administrative payment per participant account
to any third party.
. Investment Minimums. The minimum initial investment for shares
of either class is $5 million, except that the minimum initial
investment for a registered investment adviser purchasing
Institutional Class shares for its clients through omnibus
accounts is $250,000 per Portfolio. At the discretion of PIMCO
Advisors, the minimum initial investment may be waived for
Institutional or Administrative Class shares offered to clients of
PIMCO Equity Advisors, Cadence, NFJ, Pacific Investment Management
Company, Parametric and their affiliates, and to the benefit plans
of PIMCO Advisors and its affiliates. In addition, the minimum
initial investment does not apply to Institutional Class shares
offered through fee-based programs sponsored and maintained by a
registered broker-dealer and approved by the Distributor in which
each investor pays an asset based fee at an annual rate of at
least 0.50% of the assets in the account to a financial
intermediary for investment advisory and/or administrative
services.
The Trust and the Distributor may waive the minimum initial
investment for other categories of investors at their discretion.
The investment minimums discussed in this section do not apply to
participants in PIMCO Advisors Portfolio Strategies, a managed
product sponsored by PIMCO Advisors.
. Timing of Purchase Orders and Share Price Calculations. A
purchase order received by the Trust's transfer agent, National
Financial Data Services (the "Transfer Agent"), prior to the close
of regular trading (normally 4:00 p.m., Eastern time) on the New
York Stock Exchange, on a day the Trust is open for business,
together with payment made in one of the ways described below,
will be effected at that day's net asset value ("NAV"). An order
received after the close of regular trading on the New York Stock
Exchange will be effected at the NAV determined on the next
business day. However, orders received by certain retirement plans
and other financial intermediaries on a business day prior to the
close of regular trading on the New York Stock Exchange and
communicated to the Transfer Agent prior to 9:00 a.m., Eastern
time, on the following business day will be effected at the NAV
determined on the prior business day. The Trust is "open for
business" on each day the New York Stock Exchange is open for
trading, which excludes the following holidays: New Year's Day,
Martin Luther King, Jr. Day, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving Day and
Christmas Day. Purchase orders will be accepted only on days on
which the Trust is open for business.
. Initial Investment. Investors may open an account by
completing and signing a Client Registration Application and
mailing it to PIMCO Funds at 840 Newport Center Drive, Suite 300,
Newport Beach, California 92660. A Client Registration Application
may be obtained by calling 1-800-927-4648.
Except as described below, an investor may purchase Institutional
Class and Administrative Class shares only by wiring federal funds
to the Transfer Agent, National Financial Data Services, 330 West
9th Street, 4th Floor, Kansas City, Missouri 64105. Before wiring
federal funds, the investor must telephone the Trust at 1-800-927-
4648 to receive instructions for wire transfer and must provide
the following information: name of authorized person, shareholder
name, shareholder account number, name of Portfolio and share
class, amount being wired, and wiring bank name.
Prospectus 30
<PAGE>
An investor may purchase shares without first wiring federal
funds if the proceeds of the investment are derived from an
advisory account the investor maintains with PIMCO Advisors or one
of its affiliates, from surrender or other payment from an
annuity, insurance, or other contract held by Pacific Life
Insurance Company, or from an investment by broker-dealers,
institutional clients or other financial intermediaries which have
established a shareholder servicing relationship with the Trust on
behalf of their customers.
. Additional Investments. An investor may purchase additional
Institutional Class and Administrative Class shares of the
Portfolios at any time by calling the Trust and wiring federal
funds to the Transfer Agent as outlined above.
. Other Purchase Information. Purchases of a Portfolio's
Institutional Class and Administrative Class shares will be made
in full and fractional shares. In the interest of economy and
convenience, certificates for shares will not be issued.
The Trust and the Distributor each reserves the right, in its
sole discretion, to suspend the offering of shares of the
Portfolios or to reject any purchase order, in whole or in part,
when, in the judgment of management, such suspension or rejection
is in the best interests of the Trust.
An investor should invest in the Portfolios for long-term
investment purposes only. The Trust and PIMCO Advisors each
reserves the right to restrict purchases of Portfolio shares
(including exchanges) when a pattern of frequent purchases and
sales made in response to short-term fluctuations in share price
appears evident. Notice of any such restrictions, if any, will
vary according to the particular circumstances.
Institutional Class and Administrative Class shares of the Trust
are not qualified or registered for sale in all states. Investors
should inquire as to whether shares of a particular Portfolio are
available for offer and sale in the investor's state of residence.
Shares of the Trust may not be offered or sold in any state unless
registered or qualified in that jurisdiction or unless an
exemption from registration or qualification is available.
. Retirement Plans. Shares of the Portfolios are available for
purchase by retirement and savings plans, including Keogh plans,
401(k) plans, 403(b) custodial accounts, and Individual Retirement
Accounts. The administrator of a plan or employee benefits office
can provide participants or employees with detailed information on
how to participate in the plan and how to elect a Portfolio as an
investment option. Participants in a retirement or savings plan
may be permitted to elect different investment options, alter the
amounts contributed to the plan, or change how contributions are
allocated among investment options in accordance with the plan's
specific provisions. The plan administrator or employee benefits
office should be consulted for details. For questions about
participant accounts, participants should contact their employee
benefits office, the plan administrator, or the organization that
provides recordkeeping services for the plan. Investors who
purchase shares through retirement plans should be aware that plan
administrators may aggregate purchase and redemption orders for
participants in the plan. Therefore, there may be a delay between
the time the investor places an order with the plan administrator
and the time the order is forwarded to the Transfer Agent for
execution.
Redeeming . Redemptions by Mail. An investor may redeem (sell)
Shares Institutional Class and Administrative Class shares by submitting
a written request to PIMCO Funds at 840 Newport Center Drive,
Suite 300, Newport Beach, California 92660. The redemption request
should state the Portfolio from which the shares are to be
redeemed, the class of shares, the number or dollar amount of the
shares to be redeemed and the account number. The request must be
signed exactly as the names of the registered owners appear on the
Trust's account records, and the request must be signed by the
minimum number of persons designated on the Client Registration
Application that are required to effect a redemption.
. Redemptions by Telephone or Other Wire Communication. An
investor that elects this option on the Client Registration
Application (or subsequently in writing) may request redemptions
of shares by calling the Trust at 1-800-927-4648, by sending a
facsimile to 1-949-725-6830, or by other means of wire
communication. Investors should state the Portfolio and class from
which the shares are to be redeemed, the number or dollar amount
of the shares to be redeemed and the account number. Redemption
requests of an amount of $10 million or more may be initiated by
telephone, but must be confirmed in writing by an authorized party
prior to processing.
In electing a telephone redemption, the investor authorizes
Pacific Investment Management Company and the Transfer Agent to
act on telephone instructions from any person representing himself
to be the investor, and reasonably believed by Pacific Investment
Management Company or the Transfer Agent to be genuine. Neither
the Trust nor the Transfer Agent may be liable for any loss, cost
or expense for acting on instructions
31PIMCO Funds: Multi-Manager Series
<PAGE>
(whether in writing or by telephone) believed by the party
receiving such instructions to be genuine and in accordance with
the procedures described in this Prospectus. Shareholders should
realize that by electing the telephone or wire redemption option,
they may be giving up a measure of security that they might have
if they were to redeem their shares in writing. Furthermore,
interruptions in telephone service may mean that a shareholder
will be unable to effect a redemption by telephone when desired.
The Transfer Agent also provides written confirmation of
transactions initiated by telephone as a procedure designed to
confirm that telephone instructions are genuine (written
confirmation is also provided for redemption requests received in
writing). All telephone transactions are recorded, and Pacific
Investment Management Company or the Transfer Agent may request
certain information in order to verify that the person giving
instructions is authorized to do so. The Trust or Transfer Agent
may be liable for any losses due to unauthorized or fraudulent
telephone transactions if it fails to employ reasonable procedures
to confirm that instructions communicated by telephone are
genuine. All redemptions, whether initiated by letter or
telephone, will be processed in a timely manner, and proceeds will
be forwarded by wire in accordance with the redemption policies of
the Trust detailed below. See "Other Redemption Information."
Shareholders may decline telephone exchange or redemption
privileges after an account is opened by instructing the Transfer
Agent in writing at least seven business days prior to the date
the instruction is to be effective. Shareholders may experience
delays in exercising telephone redemption privileges during
periods of abnormal market activity. During periods of volatile
economic or market conditions, shareholders may wish to consider
transmitting redemption orders by telegram, facsimile or overnight
courier.
Defined contribution plan participants may request redemptions by
contacting the employee benefits office, the plan administrator or
the organization that provides recordkeeping services for the
plan.
. Timing of Redemption Requests and Share Price Calculations. A
redemption request received by the Trust or its designee prior to
the close of regular trading on the New York Stock Exchange
(normally 4:00 p.m., Eastern time), on a day the Trust is open for
business, is effective on that day. A redemption request received
after that time becomes effective on the next business day.
Redemption requests for Portfolio shares are effected at the NAV
per share next determined after receipt of a redemption request by
the Trust or its designee. The request must properly identify all
relevant information, such as account number, redemption amount
(in dollars or shares) and the Portfolio name, and must be
executed or initialed by the appropriate signatories.
. Other Redemption Information. Redemption proceeds will
ordinarily be wired to the investor's bank within three business
days after the redemption request, but may take up to seven
business days. Redemption proceeds will be sent by wire only to
the bank name designated on the Client Registration Application.
The Trust may suspend the right of redemption or postpone the
payment date at times when the New York Stock Exchange is closed,
or during certain other periods as permitted under the federal
securities laws.
For shareholder protection, a request to change information
contained in an account registration (for example, a request to
change the bank designated to receive wire redemption proceeds)
must be received in writing, signed by the minimum number of
persons designated on the Client Registration Application that are
required to effect a redemption, and accompanied by a signature
guarantee from any eligible guarantor institution, as determined
in accordance with the Trust's procedures. Shareholders should
inquire as to whether a particular institution is an eligible
guarantor institution. A signature guarantee cannot be provided by
a notary public. In addition, corporations, trusts, and other
institutional organizations are required to furnish evidence of
the authority of the persons designated on the Client Registration
Application to effect transactions for the organization.
Due to the relatively high cost of maintaining small accounts,
the Trust reserves the right to redeem Institutional Class and
Administrative Class shares in any account for their then-current
value (which will be promptly paid to the investor) if at any
time, due to redemption by the investor, the shares in the account
do not have a value of at least $100,000. A shareholder will
receive advance notice of a mandatory redemption and will be given
at least 30 days to bring the value of its account up to at least
$100,000. This mandatory redemption policy does not apply to
participants in PIMCO Advisors Portfolio Strategies, a managed
product sponsored by PIMCO Advisors.
The Trust agrees to redeem shares of each Portfolio solely in
cash up to the lesser of $250,000 or 1% of the Portfolio's net
assets during any 90-day period for any one shareholder. In
consideration of the best interests of the remaining shareholders,
the Trust reserves the right to pay any redemption proceeds
exceeding this amount in whole or in part by a distribution in
kind of securities held by a Portfolio in lieu of cash. When
shares are redeemed in kind, the redeeming shareholder may incur
transaction costs upon the disposition of the securities received
in the distribution.
Prospectus 32
<PAGE>
Redemption of Portfolio shares may be suspended when trading on
the New York Stock Exchange is restricted or during an emergency
which makes it impracticable for the Portfolios or the Underlying
Funds to dispose of their securities or to determine fairly the
value of their net assets, or duing any other period as permitted
by the Securities and Exchange Commission for the protection of
investors. Under these and other unusual circumstances, the Trust
may suspend redemptions or postpone payment for more than seven
days, as permitted by law.
Exchange An investor may exchange Institutional Class or Administrative
Privilege Class shares of a Portfolio for shares of the same class of any
other Portfolio or other series of the Trust that offers that
class based on the respective NAVs of the shares involved, subject
to any restrictions on exchanges set forth in the applicable
Fund's or series' prospectus(es). An exchange may be made by
following the redemption procedure described above under
"Redemptions by Mail" or, if the investor has elected the
telephone redemption option, by calling the Trust at 1-800-927-
4648. An investor may also exchange shares of a Portfolio for
shares of the same class of a series of PIMCO Funds: Pacific
Investment Management Series, an affiliated mutual fund family
composed primarily of fixed income portfolios managed by Pacific
Investment Management Company. Shareholders interested in such an
exchange may request a prospectus for these other series by
contacting PIMCO Funds: Pacific Investment Management Series at
the same address and telephone number as the Trust.
An investor may exchange shares only with respect to Portfolios
or other eligible series that are registered in the investor's
state of residence or where an exemption from registration is
available. In addition, an exchange is generally a taxable event
which will generate capital gains or losses, and special rules may
apply in computing tax basis when determining gain or loss. See
"Tax Consequences" in this Prospectus and "Taxation" in the
Statement of Additional Information.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Portfolio and its shareholders. In particular, a pattern
of exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Portfolio. Currently, the Trust limits the number of
"round trip" exchanges investors may make. An investor makes a
"round trip" exchange when the investor purchases shares of a
particular Portfolio, subsequently exchanges those shares for
shares of a different Portfolio or other PIMCO Fund, and then
exchanges back into the originally purchased Portfolio. The Trust
has the right to refuse any exchange for any investor who
completes (by making the exchange back into the shares of the
originally purchased Portfolio) more than six round trip exchanges
in any twelve-month period. The Trust reserves the right to impose
additional restrictions on exchanges at any time, although it will
attempt to give shareholders 30 days' prior notice whenever it is
reasonably able to do so.
How Portfolio Shares Are Priced
The net asset value ("NAV") of a Portfolio's Institutional Class
and Administrative Class shares is determined by dividing the
total value of a Portfolio's portfolio investments and other
assets attributable to that class, less any liabilities, by the
total number of shares outstanding of that class.
The assets of each Portfolio consist of shares of the Underlying
Funds, which are valued at their respective NAVs at the time of
valuation of the Portfolios' shares. For purposes of calculating
the NAV of Underlying Fund shares, portfolio securities and other
assets of the Funds for which market quotes are available are
stated at market value. Market value is generally determined on
the basis of last reported sales prices, or if no sales are
reported, based on quotes obtained from a quotation reporting
system, established market makers, or pricing services. Certain
securities or investments for which daily market quotes are not
readily available may be valued, pursuant to guidelines
established by the Board of Trustees of the Underlying Fund, with
reference to other securities or indices. Short-term investments
having a maturity of 60 days or less are generally valued at
amortized cost. Exchange traded options, futures and options on
futures are valued at the settlement price determined by the
exchange. Other securities for which market quotes are not readily
available are valued at fair value as determined in good faith by
the Fund's Board of Trustees or persons acting at the Board's
direction.
Underlying Fund investments initially valued in currencies other
than the U.S. dollar are converted to U.S. dollars using exchange
rates obtained from pricing services. As a result, the NAV of an
Underlying Fund's shares may be affected by changes in the value
of currencies in relation to the U.S. dollar. The value of
securities traded in markets outside the United States or
denominated in currencies other than the U.S. dollar
33PIMCO Funds: Multi-Manager Series
<PAGE>
may be affected significantly on a day that the New York Stock
Exchange is closed. As a result, to the extent that a Portfolio
invests in Underlying Funds that hold foreign securities, the NAV
of the Portfolio's shares may change at times when you can not
purchase, redeem or exchange shares.
Portfolio and Underlying Fund shares are valued at the close of
regular trading (normally 4:00 p.m., Eastern time) (the "NYSE
Close") on each day that the New York Stock Exchange is open. For
purposes of calculating the NAV, the Underlying Funds normally use
pricing data for domestic equity securities received shortly after
the NYSE Close and do not normally take into account trading,
clearances or settlements that take place after the NYSE Close.
Domestic fixed income and foreign securities are normally priced
using data reflecting the earlier closing of the principal markets
for those securities. Information that becomes known to the
Underlying Funds or their agents after the NAV has been calculated
on a particular day will not generally be used to retroactively
adjust the price of a security or the NAV determined earlier that
day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Underlying Funds may value securities at fair
value or estimate their value as determined in good faith by the
Fund's Board of Trustees pursuant to procedures approved by the
Board of Trustees. Fair valuation may also be used by the
Underlying Fund's Board of Trustees if extraordinary events occur
after the close of the relevant market but prior to the NYSE
Close.
Portfolio Distributions
Each Portfolio distributes substantially all of its net investment
income to shareholders in the form of dividends. A shareholder
begins earning dividends on Portfolio shares the day after the
Trust receives the shareholder's purchase payment. Dividends paid
by each Portfolio with respect to each class of shares are
calculated in the same manner and at the same time, but dividends
on Administrative Class shares are expected to be lower than
dividends on Institutional Class shares as a result of the service
and/or distribution fees applicable to Administrative Class
shares. The following shows when each Portfolio intends to declare
and distribute income dividends to shareholders of record.
<TABLE>
<CAPTION>
Portfolio At Least Annually Quarterly Monthly
---------------------------------------------------------------------------
<S> <C> <C> <C>
90/10 Portfolio .
---------------------------------------------------------------------------
60/40 Portfolio .
---------------------------------------------------------------------------
30/70 Portfolio .
---------------------------------------------------------------------------
</TABLE>
In addition, each Portfolio distributes any net capital gains it
earns from the sale of portfolio securities to shareholders no
less frequently than annually. Net short-term capital gains may be
paid more frequently.
A Portfolio's dividend and capital gain distributions with
respect to a particular class of shares will automatically be
reinvested in additional shares of the same class of the Portfolio
at NAV unless the shareholder elects to have the distributions
paid in cash. A shareholder may elect to have distributions paid
in cash on the Client Registration Application or by submitting a
written request, signed by the appropriate signatories, indicating
the account number, Portfolio name(s) and wiring instructions.
Shareholders do not pay any sales charges or other fees on shares
received through the reinvestment of Portfolio distributions.
For further information on distribution options, please contact
the Trust at 1-800-927-4648.
Tax Consequences
. Taxes on Portfolio Distributions. A shareholder subject to U.S.
federal income tax will be subject to tax on Portfolio
distributions whether they are paid in cash or reinvested in
additional shares of the Portfolios. For federal income tax
purposes, Portfolio distributions will be taxable to the
shareholder as either ordinary income or capital gains.
Portfolio dividends (i.e., distributions of investment income)
are taxable to shareholders as ordinary income. Federal taxes on
Portfolio distributions of gains are determined by how long the
Portfolio owned the investments that generated the gains, rather
than how long the shareholder owned the shares. Distributions of
gains from investments that a Portfolio owned for more than 12
months will generally be taxable to shareholders as capital gains.
Distributions of gains from investments that the Portfolio owned
for 12 months or less will generally be taxable as ordinary
income.
Prospectus 34
<PAGE>
Portfolio distributions are taxable to shareholders even if they
are paid from income or gains earned by a Portfolio prior to the
shareholder's investment and thus were included in the price paid
for the shares. For example, a shareholder who purchases shares on
or just before the record date of a Portfolio distribution will
pay full price for the shares and may receive a portion of his or
her investment back as a taxable distribution.
The Portfolios' use of a fund of funds structure could affect the
amount, timing and character of distributions to shareholders. See
"Taxation--Distributions" in the Statement of Additional
Information.
. Taxes on Redemptions or Exchanges of Shares. Any gain resulting
from the sale of Portfolio shares will generally be subject to
federal income tax. When a shareholder exchanges shares of a
Portfolio for shares of another Portfolio or series of the Trust,
the transaction will be treated as a sale of the first Portfolio's
shares for these purposes, and any gain on those shares will
generally be subject to federal income tax.
This section relates only to federal income tax; the consequences
under other tax laws may differ. Shareholders should consult their
tax advisors as to the possible application of foreign, state and
local income tax laws to Portfolio dividends and capital
distributions. Please see the Statement of Additional Information
for additional information regarding the tax aspects of investing
in the Portfolios.
35PIMCO Funds: Multi-Manager Series
<PAGE>
(This page left blank intentionally)
Prospectus 36
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Institutional Class and
Administrative Class shares of each Portfolio since the class of
shares was first offered. Certain information reflects financial
results for a single Portfolio share. The total returns in the
table represent the rate that an investor would have earned or
lost on an investment in a particular class of shares of a
Portfolio, assuming reinvestment of all dividends and
distributions. This information has been audited by
PricewaterhouseCoopers LLP, whose report, along with each
Portfolio's financial statements, are included in the Trust's
annual report to shareholders. The annual report is incorporated
by reference in the Statement of Additional Information and is
available free of charge upon request from the Distributor.
<TABLE>
<CAPTION>
Net Asset Net Realized/ Total Dividends Distributions
Year or Value Net Unrealized Income from from Net from Net
Period Beginning Investment Gain (Loss) on Investment Investment Realized
Ended of Period Income Investments Operations Income Capital Gains
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
90/10 Portfolio
Institutional
Class
02/26/99-
06/30/99 $10.91 $0.05(a) $1.23(a) $1.28 $ 0.00 $0.00
Administrative
Class
02/26/99-
06/30/99 10.91 0.04(a) 1.23(a) 1.27 0.00 0.00
60/40 Portfolio
Institutional
Class
02/26/99-
06/30/99 $10.55 $0.09(a) $0.73(a) $0.82 $(0.10) $0.00
Administrative
Class
02/26/99-
06/30/99 10.55 0.09(a) 0.72(a) 0.81 (0.09) 0.00
30/70 Portfolio
Institutional
Class
02/26/99-
06/30/99 $10.09 $0.15(a) $0.23(a) $0.38 $(0.14) $0.00
Administrative
Class
02/26/99-
06/30/99 10.09 0.14(a) 0.23(a) 0.37 (0.13) 0.00
</TABLE>
- -------
*Annualized
(a) Per share amounts based on average number of shares outstanding during the
period.
(b) The information provided under Ratio of Expenses to Average Net Assets
reflects a voluntary fee waiver of 0.05% currently in effect. If this
waiver was not reflected, Ratio of Expenses to Average Net Assets would be
0.15% for Institutional Class shares and 0.40% for Administrative Class
shares of each Portfolio.
37PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Tax Basis Net Asset Net Assets Expenses to Income (Loss)
Return of Total Value End End of Average Net to Average Portfolio
Capital Distributions of Period Total Return Period (000s) Assets Net Assets Turnover Rate
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$0.00 $ 0.00 $12.19 11.73% $11 0.10%*(b) 1.17%* 48%
0.00 0.00 12.18 11.64 11 0.35*(b) 0.95* 48
$0.00 $(0.10) $11.27 7.80% $11 0.10%*(b) 2.52%* 39%
0.00 (0.09) 11.27 7.71 11 0.35*(b) 2.44* 39
$0.00 $(0.14) $10.33 3.78% $10 0.10%*(b) 4.20%* 37%
0.00 (0.13) 10.33 3.70 10 0.35*(b) 4.03* 37
</TABLE>
Prospectus 38
<PAGE>
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<PAGE>
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<PAGE>
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<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>
For More Information
Two following documents are or will be available that offer further information
on the Portfolios and other series of PIMCO funds: Multi-Manager Series.
Annual/Semi-Annual Reports to Shareholders The Trust's annual and semi-annual
reports include a discussion of the market conditions and investment strategies
that significantly affected the Portfolios' performance during its last fiscal
year or other period.
Statement of Additional Information (SAI) The SAI contains additional
information about the Portfolios. A current SAI has been filed with the
Securities and Exchange Commission, and is incorporated into this prospectus by
reference.
To request a free copy of these documents or to make inquiries about the
Portfolios, please write or call:
PIMCO Funds:
Multi-Manager Series
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
Telephone:
1-800-927-4648
1-800-987-4626 (PIMCO
Infolink Audio Response
Network)
Information about the Trust (including the SAI) can be reviewed and copied at
the Securities and Exchange Commission's Public Reference Room in Washington,
D.C. Information on the operation of the public reference room may be obtained
by calling the Commission at 1-202-942-8090. You may also access reports and
other information about the Trust on the EDGAR database on the Commission's
Internet site at www.sec.gov, and copies of that information may be obtained,
upon payment of a duplicating fee, by writing the Public Reference Section of
the Commission, Washington, D.C. 20549-6009, 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.
SEC File Number: 811-6161
[PIMCO FUNDS LOGO APPEARS HERE]
PIMCO Funds:
Multi-Manager Series
840 Newport Center Drive
Suite 300
Newport Beach, CA 92660
www.pimcofunds.com
<PAGE>
PIMCO FUNDS PROSPECTUS
Asset Allocation
Series
April 3, 2000 PIMCO Funds Asset Allocation Series consists of three
actively managed mutual funds that invest in a diversified
Share Classes portfolio of PIMCO Funds. In addition to broad
A B C diversification, each Portfolio provides access to the
extensive asset allocation and investment management
capabilities of PIMCO Advisors L.P. and its affiliates.
90/10 Portfolio
Seeks long-term capital appreciation. The Portfolio normally
invests approximately 90% of its assets in PIMCO Stock
Funds and 10% in PIMCO Bond Funds.
60/40 Portfolio
Seeks long-term capital appreciation and current income. The
Portfolio normally invests approximately 60% of its assets
in PIMCO Stock Funds and 40% in PIMCO Bond Funds.
30/70 Portfolio
Seeks current income, with long-term capital appreciation a
secondary objective. The Portfolio normally invests
approximately 30% of its assets in PIMCO Stock Funds and 70%
in PIMCO Bond Funds.
[LOGO OF PIMCO FUNDS APPEARS HERE]
This cover is not part of the Prospectus.
<PAGE>
PIMCO Funds Prospectus
PIMCO This Prospectus describes three actively managed mutual fund
Funds: Portfolios offered by PIMCO Funds: Multi-Manager Series.
Multi-
Manager
Series
Asset Allocation Series -- 90/10 Portfolio
Asset Allocation Series -- 60/40 Portfolio
April 3, Asset Allocation Series -- 30/70 Portfolio
2000
Each Portfolio invests in a diversified portfolio of other PIMCO
Funds. This Prospectus explains what you should know about the
Portfolios before you invest. Please read it carefully.
Share
Classes
A, B
and C
The Securities and Exchange Commission has not approved or
disapproved these securities or determined if this Prospectus is
truthful or complete. Any representation to the contrary is a
criminal offense.
1 PIMCO Funds: Multi-Manager Series
<PAGE>
Table of Contents
<TABLE>
<S> <C>
Summary Information................................................ 3
Portfolio Summaries
90/10 Portfolio.................................................. 5
60/40 Portfolio.................................................. 8
30/70 Portfolio.................................................. 11
Summary of Principal Risks......................................... 14
Investment Objectives and Principal Investment Strategies.......... 20
Underlying Funds................................................... 23
Other Risk Information............................................. 26
Management of the Portfolios....................................... 27
Investment Options - Class A, B and C Shares ...................... 29
How Portfolio Shares Are Priced.................................... 32
How to Buy and Sell Shares......................................... 32
Portfolio Distributions............................................ 36
Tax Consequences................................................... 37
Financial Highlights............................................... 39
</TABLE>
Prospectus 2
<PAGE>
Summary Information
The Portfolios are intended for investors who prefer to have their
asset allocation decisions made by professional money managers.
Each Portfolio has a distinct investment objective which it seeks
to achieve by investing within specified equity and fixed income
targets and ranges among certain Funds in the PIMCO Funds family.
The Portfolios invest only in Funds in the PIMCO Funds family. The
PIMCO Funds in which the Portfolios invest are called Underlying
Funds or Funds in this Prospectus.
Some of the Underlying Funds invest primarily in equity
securities and are called Underlying Stock Funds. Other Underlying
Funds invest primarily in fixed income securities, including money
market instruments, and are called Underlying Bond Funds. The
Portfolios are named according to their equity/fixed income
allocation targets. For instance, the 90/10 Portfolio will
normally invest approximately 90% of its assets in Underlying
Stock Funds and 10% of its assets in Underlying Bond Funds.
The table below lists the investment objectives and compares the
asset allocation strategies of the Portfolios. Other important
characteristics are described in the individual Portfolio
Summaries beginning on page 5, and are discussed in greater detail
under "Investment Objectives and Principal Investment Strategies."
A "Summary of Principal Risks" begins on page 11.
<TABLE>
<CAPTION>
PIMCO Funds
Asset Allocation Series Investment Objective Allocation Strategy
----------------------------------------------------------------------
<C> <C> <S>
90/10 Portfolio Long-term capital Under normal conditions,
appreciation approximately 90% (range
of 80%-100%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 10% (range of 0%-
20%) among Underlying
Bond Funds
----------------------------------------------------------------------
60/40 Portfolio Long-term capital Under normal conditions,
appreciation and approximately 60% (range
current income of 50%-70%) of the
Portfolio's assets will
be allocated among
Underlying Stock Funds
and 40% (range of 30%-
50%) among Underlying
Bond Funds
----------------------------------------------------------------------
30/70 Portfolio Current income, with Under normal conditions,
long-term approximately 30% (range
capital appreciation as of 25%-35%) of the
a Portfolio's assets will
secondary objective be allocated among
Underlying Stock Funds
and 70% (range of 65%-
75%) among Underlying
Bond Funds
</TABLE>
Risk/Return You should choose among the Portfolios based on personal
Comparison investment objectives, investment time horizon, tolerance for risk
and personal financial circumstances. Generally speaking,
historical data suggests that the longer the time horizon, the
greater the likelihood that the total return of a portfolio that
invests primarily in equity securities will be higher than the
total return of a portfolio that invests primarily in fixed income
securities. However, an equity portfolio is generally subject to
higher levels of overall risk and price volatility than a fixed
income portfolio and is considered to be a more aggressive
investment. Based on these assumptions, the following chart gives
some indication of the comparative risk/return potential of the
Portfolios according to their equity/fixed income allocation
targets and ranges. Note that these assumptions may not be correct
in future market conditions and the chart may not accurately
predict the actual comparative risk/return of the Portfolios under
all market conditions.
90/10 Portfolio might be suitable if you have a relatively
long time horizon, seek long-term capital appreciation
potential and have a fairly high tolerance for risk and
volatility.
60/40 Portfolio might be suitable if you have a medium-
range time horizon, seek a balance of long-term capital
appreciation potential and income and have medium tolerance
for risk and volatility.
30/70 Portfolio might be suitable if you have a shorter
time horizon, seek a higher level of income combined with
some potential for long-term capital appreciation and have
a lower tolerance for risk and volatility.
It is possible to lose money on investments in the Portfolios.
While each Portfolio provides a relatively high level of
diversification in comparison to most mutual funds, a single
Portfolio may not be suitable as a complete investment program. An
investment in a Portfolio is not a deposit of a bank and is not
guaranteed or insured by the Federal Deposit Insurance Corporation
or any other government agency.
3 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary Information (continued)
Asset PIMCO Advisors L.P. serves as the investment adviser to the
Allocation Portfolios. PIMCO Advisors' Asset Allocation Committee determines
Strategies how each Portfolio allocates and reallocates its assets among the
Underlying Funds according to the Portfolio's equity/fixed income
allocation targets and ranges. The Committee attempts to diversify
each Portfolio's assets broadly among the major asset classes and
sub-classes represented by the Underlying Funds.
The major equity asset classes and sub-classes held by the
Underlying Stock Funds include those categorized by investment
style/category (growth, blend, value, enhanced index, sector-
related), region (U.S. equities, international developed markets,
international emerging markets), and market capitalization (large-
cap, mid-cap and small-cap). The major fixed income asset classes
and sub-classes held by the Underlying Bond Funds include those
categorized by sector/investment specialty (government securities,
mortgage-related securities, corporate bonds and inflation-indexed
bonds), region (U.S. fixed income, developed foreign fixed income,
emerging markets fixed income), credit quality (investment
grade/money market, medium grade, high yield), and duration (long-
term, intermediate-term and short-term).
Please see "Underlying Funds" in this Prospectus for a
description of the Underlying Funds as categorized by their
investment styles and main investments.
The Portfolios may invest in any or all of the Underlying Funds,
but will not normally invest in every Underlying Fund at any
particular time. Each Portfolio may invest in shares of the same
Underlying Funds; however, the percentage of each Portfolio's
assets so invested will vary depending on the Portfolio's
investment objective. The Asset Allocation Committee does not
allocate a Portfolio's assets according to a predetermined blend
of particular Underlying Funds. Instead, the Committee meets
regularly to determine the mix of Underlying Funds appropriate for
each Portfolio by allocating among the asset classes and sub-
classes held by the Underlying Funds. When making these decisions,
the Committee considers various quantitative and qualitative data
relating to the U.S. and foreign economies and securities markets.
This data includes projected growth trends in the U.S. and foreign
economies, forecasts for interest rates and the relationship
between short- and long-term interest rates (yield curve), current
and projected trends in inflation, relative valuation levels in
the equity and fixed income markets and various segments within
those markets, the outlook and projected growth of various
industrial sectors, information relating to business cycles,
borrowing trends and the cost of capital, political trends, data
relating to trade balances and labor information. The Committee
may also consider proprietary research provided by the investment
advisers and sub-advisers of the Underlying Funds.
The Committee then selects representative Underlying Funds for
each Portfolio to fill out the asset class and sub-class
weightings it has identified according to the Portfolio's
equity/fixed income targets and ranges. The Committee has the
flexibility to reallocate each Portfolio's assets in varying
percentages among any or all of the Underlying Funds based on the
Committee's ongoing analyses of the equity and fixed income
markets, although these tactical shifts are not expected to be
large or frequent in nature.
"Fund of The term "fund of funds" is used to describe mutual funds, such as
Funds" the Portfolios, that pursue their investment objectives by
Structure investing in other mutual funds. Your cost of investing in a
and Portfolio will generally be higher than the cost of investing in a
Expenses mutual fund that invests directly in individual stocks and bonds.
By investing in a Portfolio, you will indirectly bear fees and
expenses charged by the Underlying Funds in which the Portfolio
invests in addition to the Portfolio's direct fees and expenses.
In addition, the use of a fund of funds structure could affect the
timing, amount and character of distributions to you and therefore
may increase the amount of taxes payable by you.
Portfolio The following Portfolio Summaries identify each Portfolio's
Descriptions investment objective, principal investments and strategies,
and Fees principal risks and fees and expenses. A more detailed "Summary of
Principal Risks" describing principal risks of investing in the
Portfolios begins after the Portfolio Summaries. Because the
Portfolios have not been in operation for a full calendar year, no
performance information (e.g., a bar chart or average annual total
returns table) is included for the Portfolios. A fuller discussion
of the Portfolios' investment strategies and related information
is included under "Investment Objectives and Principal Investment
Strategies" in this Prospectus.
Prospectus 4
<PAGE>
90/10 Portfolio
- --------------------------------------------------------------------------------
Principal Investment
Investments Objective
and Seeks long-term Allocation
Strategies capital Strategy Target Range
appreciation
Underlying Stock
Funds 90% 80%-100%
Underlying Bond
Funds 10% 0%-20%
Dividend
Frequency
At least annually
The Portfolio seeks to achieve its investment objective by
normally investing approximately 90% (within a range of 80%-100%)
of its assets in Underlying Stock Funds and approximately 10%
(within a range of 0%-20%) of its assets in Underlying Bond Funds.
The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a relatively
long time horizon who seeks long-term capital appreciation
potential and has a fairly high tolerance for risk and volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, your investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Derivatives Risk .Interest Rate Risk
.Issuer Risk .Foreign Investment Risk
.Credit Risk
.Value Securities Risk .Emerging Markets Risk
.High Yield Risk
.Growth Securities Risk .Currency Risk .Mortgage Risk
.Smaller Company Risk .Focused Investment Risk
.Management Risk
.Liquidity Risk .Leveraging Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
5 PIMCO Funds: Multi-Manager Series
<PAGE>
90/10 Portfolio (continued)
- --------------------------------------------------------------------------------
Performance Shown below is summary performance information for the Portfolio
Information in a bar chart and an Average Annual Total Returns table. The
information provides some indication of the risks of investing in
the Portfolio by showing changes in its performance from year to
year and by showing how the Portfolio's average annual returns
compare with the returns of broad-based securities market indices
and an index of mutual funds. The bar chart and the information to
its right show performance of the Portfolio's Class A shares, but
the returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
Past performance is no guarantee of future results.
Calendar Year Total Returns -- Class A
Highest and
Lowest Quarter
Returns
[Return in Bar Chart] (for periods
shown in the bar
chart)
------------------
Highest (10/1/99-
12/31/99___)14.32%
------------------
Lowest (7/1/99-
19.00% 9/30/99____)-3.86%
[GRAPH APPEARS HERE]
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Portfolio Inception
1 Year (9/30/98)(/4/)
-----------------------------------------------------------------------
Class A 12.50% 22.17%
-----------------------------------------------------------------------
Class B 13.13% 23.89%
-----------------------------------------------------------------------
Class C 17.02% 26.82%
-----------------------------------------------------------------------
Russell 3000 Index(/1/) 20.89% 35.92%
-----------------------------------------------------------------------
Blended Index(/2/) 20.54% 33.44%
-----------------------------------------------------------------------
Lipper Growth Fund Average(/3/) 29.25% 44.73%
-----------------------------------------------------------------------
</TABLE>
(1) The Russell 3000 Index is an unmanaged index of the 3,000
largest U.S. companies based on total market capitalization.
It is not possible to invest directly in the index.
(2) The Blended Index represents the blended performance of a
hypothetical index made up of 72% Russell 3000 Index, 18% MSCI
All Country World ex-U.S. Index and 10% Lehman Brothers
Aggregate Bond Index. The Russell 3000 Index is described
above. The MSCI All Country World ex-U.S. Index is an
unmanaged index of stocks representing both developed and
emerging markets but excluding the United States. The Lehman
Brothers Aggregate Bond Index is an unmanaged index of
investment grade, U.S. dollar-denominated fixed income
securities of domestic issuers having a maturity greater than
one year. It is not possible to invest directly in these
indices.
(3) 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 indices. It does not
take into account sales charges.
(4) The Portfolio began operations on 9/30/98. Index comparisons
begin on 9/30/98.
Prospectus 6
<PAGE>
90/10 Portfolio (continued)
- --------------------------------------------------------------------------------
These tables describe the fees and expenses you may pay if you buy
and hold Class A, B or C shares of the Portfolio:
Fees and Shareholder Fees (fees paid directly from your investment)
Expenses
of the
Portfolio
<TABLE>
<S> <C> <C>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares are
purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees(/1/) Fees(/2/) Fund Expenses(/3/) Expenses
------------------------------------------------------------------------------------------
Class A None 0.25% 0.40% 0.76% 1.41%
------------------------------------------------------------------------------------------
Class B None 1.00 0.40 0.76 2.16
------------------------------------------------------------------------------------------
Class C None 1.00 0.40 0.76 2.16
------------------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) The Administrative Fees are subject to a reduction of 0.05% on
average net assets attributable in the aggregate to the
Portfolio's Class A, B and C shares in excess of $2.5 billion.
(3) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Portfolio with the
costs of investing in other mutual funds. The Examples assume that
you invest $10,000 in the noted class of shares for the time
periods indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
Class A $686 $972 $1,279 $2,148 $686 $972 $1,279 $2,148
-----------------------------------------------------------------------------------------------------------
Class B 719 976 1,359 2,207 219 676 1,159 2,207
-----------------------------------------------------------------------------------------------------------
Class C 319 676 1,159 2,493 219 676 1,159 2,493
-----------------------------------------------------------------------------------------------------------
</TABLE>
PIMCO Funds: Multi-Manager Series
7
<PAGE>
60/40 Portfolio
- --------------------------------------------------------------------------------
Principal Investment
Investments Objective
and
Strategies
<TABLE>
<CAPTION> Seeks long-term
capital Allocation
appreciation and Strategy Target Range
current income <S> <C> <C>
Underlying Stock
Funds 60% 50%-70%
Underlying Bond
Funds 40% 30%-50%
</TABLE>
Dividend
Frequency
Quarterly
The Portfolio seeks to achieve its investment objective by
normally investing approximately 60% (within a range of 50%-70%)
of its assets in Underlying Stock Funds and approximately 40%
(within a range of 30%-50%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a medium-range
time horizon who seeks a balance of long-term capital appreciation
potential and income and has a medium tolerance for risk and
volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, your investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
.Market Risk .Credit Risk .Emerging Markets Risk
.Issuer Risk .High Yield Risk .Currency Risk
.Value Securities Risk .Mortgage Risk .Focused Investment Risk
.Growth Securities Risk .Liquidity Risk
.Smaller Company Risk .Derivatives Risk
.Interest Rate Risk .Leveraging Risk
.Foreign Investment Risk
.Management Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
Prospectus 8
<PAGE>
60/40 Portfolio (continued)
- --------------------------------------------------------------------------------
Performance Shown below is summary performance information for the Portfolio
Information in a bar chart and an Average Annual Total Returns table. The
information provides some indication of the risks of investing in
the Portfolio by showing changes in its performance from year to
year and by showing how the Portfolio's average annual returns
compare with the returns of broad-based securities market indices
and an index of mutual funds. The bar chart and the information to
its right show performance of the Portfolio's Class A shares, but
the returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
Past performance is no guarantee of future results.
Calendar Year Total Returns -- Class A
Highest and
Lowest Quarter
[Return in Bar Chart] Returns
(for periods
shown in the bar
chart)
------------------
Highest (10/1/99-
12/31/99_____9.40%)
------------------
Lowest (7/1/99-
12.03% 9/30/99_____-2.40%)
[GRAPH APPEARS HERE]
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Portfolio Inception
1 Year (9/30/98)(/5/)
------------------------------------------------------------------------
Class A 5.87% 13.02%
------------------------------------------------------------------------
Class B 6.10% 14.25%
------------------------------------------------------------------------
Class C 10.13% 17.35%
------------------------------------------------------------------------
Russell 3000 Index(/1/) 20.89% 35.92%
------------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(/2/) -0.82% -0.39%
------------------------------------------------------------------------
Blended Index(/3/) 13.12% 21.30%
------------------------------------------------------------------------
Lipper Balanced Fund Average(/4/) 8.79% 16.57%
------------------------------------------------------------------------
</TABLE>
(1) The Russell 3000 Index is an unmanaged index of the 3,000
largest U.S. companies based on total market capitalization.
It is not possible to invest directly in the index.
(2) The Lehman Brothers Aggregate Bond Index is an unmanaged
index of investment grade, U.S. dollar-denominated fixed
income securities of domestic issuers having a maturity
greater than one year. It is not possible to invest directly
in the index.
(3) The Blended Index represents the blended performance of a
hypothetical index made up of 48% Russell 3000 Index, 12%
MSCI All Country World ex-U.S. Index and 40% Lehman Brothers
Aggregate Bond Index. The Russell 3000 Index and Lehman
Brothers Aggregate Bond Index are described above. The MSCI
All Country World ex-U.S. Index is an unmanaged index of
stocks representing both developed and emerging markets but
excluding the United States. It is not possible to invest
directly in these indices.
(4) The Lipper Balanced Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. whose primary objective is to conserve
principal by maintaining at all times a balanced portfolio of
both stocks and bonds. It does not take into account sales
charges.
(5) The Portfolio began operations on 9/30/98. Index comparisons
begin on 9/30/98.
9 PIMCO Funds: Multi-Manager Series
<PAGE>
60/40 Portfolio (continued)
- --------------------------------------------------------------------------------
These tables describe the fees and expenses you may pay if you buy
and hold Class A, B or C shares of the Portfolio:
Fees and Shareholder Fees (fees paid directly from your investment)
Expenses
of the
Portfolio
<TABLE>
<S> <C> <C>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
Class A 5.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares
are purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
--------------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees(/1/) Fees(/2/) Fund Expenses(/3/) Expenses
-------------------------------------------------------------------------------------------------
Class A None 0.25% 0.40% 0.65% 1.30%
-------------------------------------------------------------------------------------------------
Class B None 1.00 0.40 0.65 2.05
-------------------------------------------------------------------------------------------------
Class C None 1.00 0.40 0.65 2.05
-------------------------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and Class
C shares, a Class B or Class C shareholders may, depending
upon the length of time the shares are held, pay more than the
economic equivalent of the maximum front-end sales charges
permitted by relevant rules of the National Association of
Securities Dealers, Inc.
(2) The Administrative Fees are subject to a reduction of 0.05% on
average net assets attributable in the aggregate to the
Portfolio's Class A, B and C shares in excess of $2.5 billion.
(3) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated based
upon a recent allocation of the Portfolio's assets among
Underlying Funds and upon the total annual operating expenses
of Institutional Class shares of these Underlying Funds. For a
listing of the expenses associated with each Underlying Fund,
please see "Management of the Portfolios--Underlying Fund
Expenses." Total Annual Portfolio Operating Expenses and the
Examples set forth below are based on estimates of the
Underlying Fund Expenses the Portfolio will incur. Actual
Underlying Fund Expenses for the Portfolio are expected to
vary with changes in the allocation of the Portfolio's assets,
and may be higher or lower than those shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Portfolio with the
costs of investing in other mutual funds. The Examples assume that
you invest $10,000 in the noted class of shares for the time
periods indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
Class A $675 $939 $1,224 $2,032 $675 $939 $1,224 $2,032
-----------------------------------------------------------------------------------------------------------
Class B 708 943 1,303 2,091 208 643 1,103 2,091
-----------------------------------------------------------------------------------------------------------
Class C 308 643 1,103 2,379 208 643 1,103 2,379
-----------------------------------------------------------------------------------------------------------
</TABLE>
Prospectus 10
<PAGE>
30/70 Portfolio
<TABLE>
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Principal Investment Allocation Strategy Target Range
Investments Objective Underlying Stock Funds 30% 25%-35%
and Seeks current income, with Underlying Bond Funds 70% 65%-75%
Strategies long-term capital appreciation
as a secondary objective
Dividend Frequency
Monthly
</TABLE>
The Portfolio seeks to achieve its investment objective by
normally investing approximately 30% (within a range of 25%-35%)
of its assets in Underlying Stock Funds and approximately 70%
(within a range of 65%-75%) of its assets in Underlying Bond
Funds. The Portfolio invests all of its assets in shares of the
Underlying Funds and does not invest directly in stocks or bonds
of other issuers.
Please see "Asset Allocation Strategies" on page 3 for a summary
of how the Asset Allocation Committee allocates and reallocates
the Portfolio's assets among particular Underlying Funds.
The Portfolio may concentrate investments in a particular
Underlying Fund by investing more than 25% of its assets in that
Fund.
Based on the Portfolio's equity/fixed income allocation
strategy, it might be suitable for an investor with a shorter time
horizon who seeks a higher level of income combined with some
potential for long-term capital appreciation and has a lower
tolerance for risk and volatility.
- --------------------------------------------------------------------------------
Principal Allocation Risk The Portfolio's investment performance depends
Risks upon how its assets are allocated and reallocated among particular
Underlying Funds. A principal risk of investing in the Portfolio
is that the Asset Allocation Committee's allocation techniques and
decisions will not produce the desired results, and the Portfolio
may not achieve its investment objective.
Underlying Fund Risks The value of your investment in the
Portfolio is directly related to the investment performance of the
Underlying Funds in which it invests. Therefore, the principal
risks of investing in the Portfolio are closely related to the
principal risks associated with the Underlying Funds and their
investments. Because the Portfolio's allocation among the
Underlying Funds will vary, your investment may be subject to any
and all of these risks at different times and to different
degrees.
Among the principal risks of the Underlying Funds, which could
adversely affect the net asset value, yield and total return of
the Portfolio, are:
. Interest Rate Risk . Value Securities Risk . Emerging Markets
. Credit Risk . Growth Securities Risk Risk
. High Yield Risk . Smaller Company Risk . Currency Risk
. Mortgage Risk . Liquidity Risk . Focused Investment
. Market Risk . Derivatives Risk Risk
. Issuer Risk . Foreign Investment Risk . Leveraging Risk
. Management Risk
Please see "Summary of Principal Risks" following the Portfolio
Summaries for a description of these and other risks associated
with the Underlying Funds and an investment in the Portfolio.
11PIMCO Funds: Multi-Manager Series
<PAGE>
30/70 Portfolio (continued)
- --------------------------------------------------------------------------------
Performance Shown below is summary performance information for the Portfolio
Information in a bar chart and an Average Annual Total Returns table. The
information provides some indication of the risks of investing in
the Portfolio by showing changes in its performance from year to
year and by showing how the Portfolio's average annual returns
compare with the returns of broad-based securities market indices
and an index of mutual funds. The bar chart and the information to
its right show performance of the Portfolio's Class A shares, but
the returns do not reflect the impact of sales charges (loads). If
they did, the returns would be lower than those shown. Unlike the
bar chart, performance for Class A, B and C shares in the Average
Annual Total Returns table reflects the impact of sales charges.
Past performance is no guarantee of future results.
Calendar Year Total Returns -- Class A
[Return in Bar Chart] Highest and Lowest Quarter Returns
(for periods shown in the bar chart)
------------------------------------
Highest (10/1/99-12/31/99) 4.74%
------------------------------------
4.64% Lowest (1/1/99-3/31/99) -1.43%
[GRAPH APPEARS HERE]
Calendar Year End (through 12/31)
Average Annual Total Returns (for periods ended 12/31/99)
<TABLE>
<S> <C> <C>
Portfolio Inception
1 Year (9/30/98)(/4/)
-------------------------------------------------------------------
Class A -0.07% 4.73%
-------------------------------------------------------------------
Class B -1.10% 4.66%
-------------------------------------------------------------------
Class C 2.91% 7.82%
-------------------------------------------------------------------
Lehman Brothers Aggregate Bond Index(/1/) -0.82% -0.39%
-------------------------------------------------------------------
Blended Index(/2/) 6.00% 10.04%
-------------------------------------------------------------------
Lipper General Bond Fund Average(/3/) 1.17% 2.88%
-------------------------------------------------------------------
</TABLE>
(1) The Lehman Brothers Aggregate Bond Index is an unmanaged
index of investment grade, U.S. dollar-denominated fixed
income securities of domestic issuers having a maturity
greater than one year. It is not possible to invest directly
in the index.
(2) The Blended Index represents the blended performance of a
hypothetical index made up of 24% Russell 3000 Index, 6% MSCI
All Country World ex-U.S. Index and 70% Lehman Brothers
Aggregate Bond Index. The Russell 3000 Index is an unmanaged
index of the 3,000 largest U.S. companies based on total
market capitalization. The MSCI All Country World ex-U.S.
Index is an unmanaged index of stocks representing both
developed and emerging markets but excluding the United
States. The Lehman Brothers Aggregate Bond Index is described
above. It is not possible to invest directly in these
indices.
(3) The Lipper General Bond Fund Average is a total return
performance average of funds tracked by Lipper Analytical
Services, Inc. that intend to keep most of their assets in
corporate and government debt issues and do not have any
quality or maturity restrictions. It does not take into
account sales charges.
(4) The Portfolio began operations on 9/30/98. Index comparisons
begin on 9/30/98.
Prospectus 12
<PAGE>
30/70 Portfolio (continued)
- --------------------------------------------------------------------------------
These tables describe the fees and expenses you may pay if you buy
and hold Class A, B or C shares of the Portfolio:
Fees and Shareholder Fees (fees paid directly from your investment)
Expenses
of the
Portfolio
<TABLE>
<S> <C> <C>
Maximum Sales Charge (Load) Imposed Maximum Contingent Deferred Sales Charge (Load)
on Purchases (as a percentage of offering price) (as a percentage of original purchase price)
------------------------------------------------------------------------------------------------------
Class A 4.50% 1%(/1/)
------------------------------------------------------------------------------------------------------
Class B None 5%(/2/)
------------------------------------------------------------------------------------------------------
Class C None 1%(/3/)
------------------------------------------------------------------------------------------------------
</TABLE>
(1) Imposed only in certain circumstances where Class A shares
are purchased without a front-end sales charge at the time of
purchase.
(2) The maximum CDSC is imposed on shares redeemed in the first
year. For shares held longer than one year, the CDSC declines
according to the schedule set forth under "Investment
Options--Class A, B and C Shares--Contingent Deferred Sales
Charges (CDSCs)--Class B Shares."
(3) The CDSC on Class C shares is imposed only on shares redeemed
in the first year.
Annual Portfolio Operating Expenses (expenses that are deducted
from Portfolio assets)
<TABLE>
<S> <C> <C> <C> <C> <C>
Other Expenses
---------------------------------
Distribution Total Annual
Advisory and/or Service Administrative Underlying Portfolio Operating
Share Class Fees (12b-1) Fees(/1/) Fees(/2/) Fund Expenses(/3/) Expenses
------------------------------------------------------------------------------------------
Class A None 0.25% 0.40% 0.55% 1.20%
------------------------------------------------------------------------------------------
Class B None 1.00 0.40 0.55 1.95
------------------------------------------------------------------------------------------
Class C None 1.00 0.40 0.55 1.95
------------------------------------------------------------------------------------------
</TABLE>
(1) Due to the 12b-1 distribution fee imposed on Class B and
Class C shares, a Class B or Class C shareholders may,
depending upon the length of time the shares are held, pay
more than the economic equivalent of the maximum front-end
sales charges permitted by relevant rules of the National
Association of Securities Dealers, Inc.
(2) The Administrative Fees are subject to a reduction of 0.05%
on average net assets attributable in the aggregate to the
Portfolio's Class A, B, and C shares in excess of $2.5
billion.
(3) Based on estimated expenses for the current fiscal year.
Underlying Fund Expenses for the Portfolio are estimated
based upon a recent allocation of the Portfolio's assets
among Underlying Funds and upon the total annual operating
expenses of Institutional Class shares of these Underlying
Funds. For a listing of the expenses associated with each
Underlying Fund, please see "Management of the Portfolios--
Underlying Fund Expenses." Total Annual Portfolio Operating
Expenses and the Examples set forth below are based on
estimates of the Underlying Fund Expenses the Portfolio will
incur. Actual Underlying Fund Expenses for the Portfolio are
expected to vary with changes in the allocation of the
Portfolio's assets, and may be higher or lower than those
shown above.
Examples. The Examples are intended to help you compare the cost
of investing in Class A, B or C shares of the Portfolio with the
costs of investing in other mutual funds. The Examples assume that
you invest $10,000 in the noted class of shares for the time
periods indicated, your investment has a 5% return each year, the
reinvestment of all dividends and distributions, and the
Portfolio's operating expenses remain the same. Although your
actual costs may be higher or lower, the Examples show what your
costs would be based on these assumptions.
<TABLE>
<CAPTION>
Example: Assuming you do not
Example: Assuming you redeem your shares at the end of each period redeem your shares
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Share Class Year 1 Year 3 Year 5 Year 10 Year 1 Year 3 Year 5 Year 10
-----------------------------------------------------------------------------------------------------------
Class A $567 $814 $1,080 $1,839 $567 $814 $1,080 $1,839
-----------------------------------------------------------------------------------------------------------
Class B 698 912 1,252 1,984 198 612 1,052 1,984
-----------------------------------------------------------------------------------------------------------
Class C 298 612 1,052 2,275 198 612 1,052 2,275
-----------------------------------------------------------------------------------------------------------
</TABLE>
13 PIMCO Funds: Multi-Manager Series
<PAGE>
Summary of Principal Risks
The value of your investment in a Portfolio changes with the
values of that Portfolio's investments in the Underlying Funds.
Many factors can affect those values. The factors that are most
likely to have a material effect on a particular Portfolio's
investments as a whole are called "principal risks." The principal
risks of each Portfolio are identified in the Portfolio Summaries
beginning on page 5 and are summarized in this section. There is
no guarantee that a Portfolio will be able to achieve its
investment objective.
Allocation Risk
Each Portfolio's investment performance depends upon how its
assets are allocated and reallocated among particular Underlying
Funds according to the Portfolio's equity/fixed income allocation
targets and ranges. A principal risk of investing in each
Portfolio is that PIMCO Advisors' Asset Allocation Committee will
make less than optimal or poor asset allocation decisions. The
Committee attempts to identify asset classes and sub-classes
represented by the Underlying Funds that will provide consistent,
quality performance for the Portfolios, but there is no guarantee
that the Committee's allocation techniques will produce the
desired results. It is possible that the Committee will focus on
Underlying Funds that perform poorly or underperform other
available Funds under various market conditions. You could lose
money on your investment in a Portfolio as a result of these
allocation decisions.
Underlying Fund Risks
Because each Portfolio invests all of its assets in Underlying
Funds, the risks associated with investing in the Portfolios are
closely related to the risks associated with the securities and
other investments held by the Underlying Funds. The ability of a
Portfolio to achieve its investment objective will depend upon the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved.
Each Portfolio's net asset value will fluctuate in response to
changes in the net asset values of the Underlying Funds in which
it invests. The extent to which the investment performance and
risks associated with a particular Portfolio correlate to those of
a particular Underlying Fund will depend upon the extent to which
the Portfolio's assets are allocated from time to time for
investment in the Underlying Fund, which will vary. A Portfolio's
investment in a particular Underlying Fund may and in some cases
is expected to exceed 25% of its assets. To the extent that a
Portfolio invests a significant portion of its assets in an
Underlying Fund, it will be particularly sensitive to the risks
associated with that Fund.
The following summarizes principal risks associated with
investments in the Underlying Funds and, indirectly, with your
investment in a Portfolio. Each Underlying Fund may be subject to
additional principal risks other than those described below
because the types of investments made by an Underlying Fund can
change over time. The summary is not intended to be exhaustive.
For a more complete description of these risks and the securities
and investment techniques used by the Underlying Funds, please
refer to the Statement of Additional Information and the
Underlying Fund prospectuses, which are incorporated herein by
reference and are available free of charge by telephoning the
Distributor at 1-800-426-0107.
Market The market price of securities owned by an Underlying Fund may go
Risk up or down, sometimes rapidly or unpredictably. Securities may
decline in value due to factors affecting securities markets
generally or particular industries represented in the securities
markets. The value of a security may decline due to general market
conditions which are not specifically related to a particular
company, such as real or perceived adverse economic conditions,
changes in the general outlook for corporate earnings, changes in
interest or currency rates, or adverse investor sentiment
generally. They may also decline due to factors which affect a
particular industry or industries, such as labor shortages or
increased production costs and competitive conditions within an
industry. Equity securities generally have greater price
volatility than fixed income securities and the Underlying Stock
Funds are particularly sensitive to these market risks.
Issuer
Risk
The value of a security may also decline for a number of reasons
which directly relate to the issuer, such as management
performance, financial leverage and reduced demand for the
issuer's goods or services.
Prospectus 14
<PAGE>
Value Each Underlying Stock Fund may invest in companies that may not be
Securities expected to experience significant earnings growth, but whose
Risk securities the Fund's portfolio manager believes are selling at a
price lower than their true value. PIMCO Equity Income,
Renaissance, Value, Small-Cap Value, Capital Appreciation, Mid-
Cap, Small-Cap and Micro-Cap Funds place particular emphasis on
value securities. Companies that issue value securities may have
experienced adverse business developments or may be subject to
special risks that have caused their securities to be out of
favor. If a portfolio manager's assessment of a company's
prospects is wrong, or if the market does not recognize the value
of the company, the price of its securities may decline or may not
approach the value that the portfolio manager anticipates.
Growth Each Underlying Stock Fund may invest in equity securities of
Securities companies that its portfolio manager believes will experience
Risk relatively rapid earnings growth. PIMCO Growth, Target,
Opportunity, Capital Appreciation, Mid-Cap, Small-Cap, Micro-Cap,
International Growth and Innovation Funds place particular
emphasis on growth securities. Growth securities typically trade
at higher multiples of current earnings than other securities.
Therefore, the values of growth securities may be more sensitive
to changes in current or expected earnings than the values of
other securities.
Smaller The general risks associated with equity securities and liquidity
Company risk are particularly pronounced for securities of companies with
Risk market capitalizations that are small compared to other publicly
traded companies. These companies may have limited product lines,
markets or financial resources or they may depend on a few key
employees. Securities of smaller companies may trade less
frequently and in lesser volume than more widely held securities
and their values may fluctuate more sharply than other securities.
They may also trade in the over-the-counter market or on a
regional exchange, or may otherwise have limited liquidity. PIMCO
Opportunity, Small-Cap, Micro-Cap, Small-Cap Value and Innovation
Funds generally have substantial exposure to this risk. PIMCO
Target 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. Smaller
company risk also applies to fixed income securities issued by
smaller companies and may affect certain investments of the
Underlying Bond Funds.
Liquidity Many of the Underlying Funds are subject to liquidity risk.
Risk Liquidity risk exists when particular investments are difficult to
purchase or sell, possibly preventing a Fund from selling out of
these illiquid securities at an advantageous time or price.
Underlying Funds with principal investment strategies that involve
securities of companies with smaller market capitalizations,
foreign securities, derivatives or securities with substantial
market and/or credit risk tend to have the greatest exposure to
liquidity risk.
Derivatives
Risk Many of the Underlying Funds may, but are not required to, use a
number of derivative instruments for risk management purposes or
as part of their investment strategies. Generally, derivatives are
financial contracts whose value depends upon, or is derived from,
the value of an underlying asset, reference rate or index, and may
relate to stocks, bonds, interest rates, currencies or currency
exchange rates, commodities, and related indexes. Examples of
derivative instruments include options contracts, futures
contracts, options on futures contracts and swap agreements. An
Underlying Fund's use of derivative instruments involves risks
different from, or possibly greater than, the risks associated
with investing directly in securities and other traditional
investments. Also, an Underlying Fund's portfolio manager may
decide not to employ any of these strategies and there is no
assurance that any derivatives strategy used by a Fund will
succeed.
A description of the various derivative instruments in which the
Underlying Funds may invest and the risks associated with each
instrument is included in the Underlying Fund prospectuses and in
the Statement of Additional Information. The following provides a
more general discussion of important risk factors relating to all
derivative instruments that may be used by the Underlying Funds.
Management Risk Derivative products are highly specialized
instruments that require investment techniques and risk analyses
different from those associated with stocks and bonds. The use of
a derivative requires an understanding not only of the underlying
instrument but also of the derivative itself, without the benefit
of observing the performance of the derivative under all possible
market conditions.
Credit Risk The use of a derivative instrument involves the risk
that a loss may be sustained as a result of the failure of another
party to the contract (usually referred to as a "counterparty") to
make required payments or otherwise comply with the contract's
terms.
15PIMCO Funds: Multi-Manager Series
<PAGE>
Liquidity Risk Liquidity risk exists when a particular
derivative instrument is difficult to purchase or sell. If a
derivative transaction is particularly large or if the relevant
market is illiquid (as is the case with many privately negotiated
derivatives), it may not be possible to initiate a transaction or
liquidate a position at an advantageous time or price.
Leveraging Risk Because many derivatives have a leverage
component, adverse changes in the value or level of the underlying
asset, reference rate or index can result in a loss substantially
greater than the amount invested in the derivative itself. Certain
derivatives have the potential for unlimited loss, regardless of
the size of the initial investment. When an Underlying Fund uses
derivatives for leverage, investments in that Fund will tend to be
more volatile, resulting in larger gains or losses in response to
market changes. To limit leveraging risk, the Underlying Funds
observe asset segregation requirements to cover their obligations
under derivative instruments.
Lack of Availability Because the markets for certain derivative
instruments (including markets located in foreign countries) are
relatively new and still developing, suitable derivatives
transactions may not be available in all circumstances for risk
management or other purposes. There is no assurance that an
Underlying Fund will engage in derivatives transactions at any
time or from time to time. A Fund's ability to use derivatives may
also be limited by certain regulatory considerations.
Market and Other Risks Like most other investments, derivative
instruments are subject to the general risk that the market value
of the instrument will change in a way detrimental to an
Underlying Fund's interest. If a portfolio manager incorrectly
forecasts the values of securities, currencies or interest rates
or other economic factors in using derivatives for an Underlying
Fund, the Fund might have been in a better position if it had not
entered into the transaction at all. While some strategies
involving derivative instruments can reduce the risk of loss, they
can also reduce the opportunity for gain or even result in losses
by offsetting favorable price movements in other investments of an
Underlying Fund. An Underlying Fund may also have to buy or sell a
security at a disadvantageous time or price because the Fund is
legally required to maintain offsetting positions or asset
coverage in connection with certain derivatives transactions.
Other risks in using derivatives include the risk of mispricing
or improper valuation of derivatives and the inability of
derivatives to correlate perfectly with underlying assets, rates
and indexes. Many derivatives, in particular privately negotiated
derivatives, are complex and often valued subjectively. Improper
valuations can result in increased cash payment requirements to
counterparties or a loss of value to an Underlying Fund. Also, the
value of derivatives may not correlate perfectly, or at all, with
the value of the assets, reference rates or indexes they are
designed to closely track. In addition, an Underlying Fund's use
of derivatives may also cause the Fund to realize higher amounts
of short-term capital gains (taxed at ordinary income tax rates
when distributed to shareholders who are individuals) than if the
Fund had not used such instruments.
Foreign Many Underlying Funds (in particular, PIMCO International,
Investment International Growth, Structured Emerging Markets, Tax-Efficient
Risk Structured Emerging Markets, Global Bond, Foreign Bond and
Emerging Markets Bond Funds) invest in securities of foreign
issuers, securities traded principally in securities markets
outside the United States and/or securities denominated in foreign
currencies (together, "foreign securities"). These Funds may
experience more rapid and extreme changes in value than Funds that
invest exclusively in securities of U.S. issuers or securities
that trade exclusively in U.S. markets.
The securities markets of many foreign countries are relatively
small, with a limited number of companies representing a small
number of industries. Foreign securities often trade with less
frequency and volume than domestic securities and therefore may
exhibit greater price volatility. Additionally, issuers of foreign
securities are usually not subject to the same degree of
regulation as U.S. issuers. Reporting, accounting and auditing
standards of foreign countries differ, in some cases
significantly, from U.S. standards. Also, nationalization,
expropriation or confiscatory taxation, currency blockage,
political changes or diplomatic developments could adversely
affect an Underlying Fund's investments in a foreign country. In
the event of nationalization, expropriation or other confiscation,
a Fund could lose its entire investment in foreign securities. To
the extent that an Underlying Fund invests a significant portion
of its assets in a narrowly defined geographic area such as
Eastern Europe, South Africa or Asia, the Fund will generally have
more exposure to regional economic risks associated with foreign
investments. Adverse conditions in certain regions (such as
Southeast Asia) can also adversely affect securities of other
countries whose economies appear to be unrelated. In addition,
special U.S. tax considerations may apply to an Underlying Fund's
investment in foreign securities.
Prospectus 16
<PAGE>
Certain Underlying Bond Funds may invest in sovereign debt
issued by governments, their agencies or instrumentalities, or
other government-related entities. Holders of sovereign debt may
be requested to participate in the rescheduling of such debt and
to extend further loans to governmental entities. In addition,
there is no bankruptcy proceeding by which defaulted sovereign
debt may be collected.
Emerging Certain Underlying Funds (in particular, PIMCO Structured Emerging
Markets Markets, Tax-Efficient Structured Emerging Markets and Emerging
Risk Markets Bond Funds) may invest in the securities of issuers based
in countries with developing or "emerging market" economies. These
securities may present market, credit, currency, liquidity, legal,
political and other risks different from, or greater than, the
risks of investing in developed foreign countries.
Currency Many Underlying Funds may invest directly in foreign currencies or
Risk in securities that trade in, or receive revenues in, foreign
currencies. To the extent that they do so, these Funds are subject
to the risk that those currencies will decline in value relative
to the U.S. dollar, or, in the case of hedging positions, that the
U.S. Dollar will decline in value relative to the currency being
hedged. PIMCO Global Bond, Foreign Bond, Emerging Markets Bond,
International, International Growth, Structured Emerging Markets
and Tax-Efficient Structured Emerging Markets Funds are
particularly sensitive to currency risk. Currency rates in foreign
countries may fluctuate significantly over short periods of time
for a number of reasons, including changes in interest rates,
intervention (or the failure to intervene) by U.S. or foreign
governments, central banks or supranational entities such as the
International Monetary Fund, or by the imposition of currency
controls or other political developments in the U.S. or abroad.
For example, significant uncertainty surrounds the introduction of
the euro (a common currency unit for the European Union) in
January 1999 and its effect on the value of securities denominated
in local European currencies. These and other currencies in which
Underlying Fund assets are denominated may be devalued against the
U.S. dollar, resulting in a loss to such Funds.
Focused Focusing Fund investments in a small number of issuers, industries
Investment or foreign currencies increases risk. PIMCO Global Bond, Foreign
Risk Bond and Emerging Markets Bond Funds are "non-diversified," which
means that they invest in a smaller number of issuers than
diversified mutual funds. Other Underlying Funds also normally
invest in a relatively small number of issuers. In addition, many
Underlying Bond Funds may invest a substantial portion of their
assets in the bonds of similar projects or from issuers in the
same state. To the extent that they focus their investments, the
Underlying Funds may have more risk because changes in the value
of a single security or the impact of a single economic, political
or regulatory occurrence may have a greater adverse impact on the
Underlying Fund's net asset value. Some of those investments also
may present substantial credit or other risks. PIMCO
International, International Growth, Structured Emerging Markets,
Tax-Efficient Structured Emerging Markets, Global Bond, Foreign
Bond and Emerging Markets Bond Funds may be subject to increased
risk to the extent they focus their assets in securities
denominated in a particular foreign currency or in a narrowly
defined geographic area outside the U.S. Similarly, PIMCO
Innovation Fund is vulnerable to events affecting companies which
use innovative technologies to gain a strategic, competitive
advantage in their industry and companies that provide and service
those technologies because it normally concentrates its
investments in those companies. Also, the Underlying Funds may
from time to time have greater risk because they invest a
substantial portion of their assets in related industries such as
"technology" or "financial and business services."
Although each Portfolio normally invests in a number of different
Underlying Funds, to the extent that a Portfolio concentrates a
significant portion of its assets in a single Underlying Fund, it
will be particularly sensitive to the risks associated with that
Fund and any investments in which that Fund concentrates.
Leveraging Certain Underlying Funds may engage in transactions or purchase
Risk instruments that give rise to forms of leverage. Such transactions
and instruments may include, among others, the use of reverse
repurchase agreements and other borrowings, the investment of
collateral from loans of portfolio securities, or the use of when-
issued, delayed-delivery or forward commitment transactions. An
Underlying Fund's use of derivatives may also involve leverage.
Leverage, including borrowing, will cause the value of an
Underlying Fund's shares to be more volatile that if the Fund did
not use leverage. This is because leverage tends to exaggerate the
effect of any increase or decrease in the value of a Fund's
portfolio securities. The use of leverage may also cause an
Underlying Fund to liquidate portfolio positions when it may not
be advantageous to do so in order to satisfy its obligations or to
meet segregation requirements.
17 PIMCO Funds: Multi-Manager Series
<PAGE>
Interest All of the Underlying Funds that invest in fixed income
Rate Risk securities, and particularly the Underlying Bond Funds, are
subject to interest rate risk. Changes in the market values of
fixed income securities are largely a function of changes in the
current level of interest rates. The value of an Underlying Fund's
investments in fixed income securities will typically change as
the level of interest rates fluctuate. During periods of declining
interest rates, the value of fixed income securities generally
rise. Conversely, during periods of rising interest rates, the
value of fixed income securities generally decline.
"Duration" is one measure of the expected life of a fixed income
security that is used to determine the sensitivity of a security's
price to changes in interest rates. Securities with longer
durations tend to be more sensitive to changes in interest rates,
usually making them more volatile than securities with shorter
durations. Accordingly, Underlying Bond Funds with longer average
portfolio durations (e.g., PIMCO Long-Term U.S. Government Fund)
will be more sensitive to changes in interest rates than Funds
with shorter average portfolio durations (e.g., PIMCO Money
Market, Short-Term and Low Duration Funds). Also, some portfolios
(e.g., those with mortgage-backed and other prepayable securities)
have changing durations and may have increasing durations
precisely when that is least advantageous (i.e., when interest
rates are rising).
Many Underlying Funds, including most of the Underlying Bond
Funds, may invest in securities that are particularly sensitive to
fluctuations in prevailing interest rates and have relatively high
levels of interest rate risk. These include various mortgage-
related securities (for instance, the interest-only or "IO" class
of a stripped mortgage-backed security) and "zero coupon"
securities (fixed income securities, including certain U.S.
Government securities, that do not make periodic interest payments
and are purchased at a discount from their value at maturity).
Credit All of the Underlying Funds are subject to credit risk. This is
Risk the risk that the issuer or the guarantor of a fixed income
security, or the counterparty to a derivatives contract,
repurchase agreement or a loan of portfolio securities, will be
unable or unwilling to make timely principal and/or interest
payments, or to otherwise honor its obligations. Securities are
subject to varying degrees of credit risk, which are often
reflecting in credit ratings provided by rating agencies such as
Moody's Investors Service, Inc. ("Moody's") and Standard & Poor's
Ratings Services ("S&P").
The Underlying Funds that invest in fixed income securities
(particularly the Underlying Bond Funds) are subject to varying
degrees of risk that the issuers of the securities will have their
credit ratings downgraded or will default, potentially reducing
the Underlying Fund's share price and income level. Nearly all
fixed income securities are subject to some credit risk, whether
the issuers of the securities are corporations, states and local
governments or foreign governments. Even certain U.S. Government
securities are subject to credit risk.
High High yield securities (commonly known as "junk bonds") are fixed
Yield income securities rated lower than Baa by Moody's or BBB by S&P,
Risk or unrated securities determined to be of comparable quality.
Underlying Bond Funds which invest in high yield securities (in
particular, PIMCO High Yield and Emerging Markets Bond Funds) may
be subject to greater volatility and higher levels of credit,
liquidity and other risks than Funds that invest exclusively in
higher quality fixed income securities (e.g., PIMCO Money Market
and Long-Term U.S. Government Funds). High yield securities are
considered predominately speculative with respect to the issuer's
continuing ability to make principal and interest payments (credit
risk). High yield securities may also be more susceptible to real
or perceived adverse economic and competitive industry conditions
than higher quality fixed income securities. An economic downturn
or period of rising interest rates could adversely affect the
market for high yield securities and reduce an Underlying Bond
Fund's ability to sell its high yield securities (liquidity risk).
Mortgage Most of the Underlying Bond Funds may invest in mortgage-related
Risk securities. Rising interest rates tend to extend the duration of
mortgage-related securities, making them more sensitive to changes
in interest rates. As a result, in a period of rising interest
rates, an Underlying Fund that holds mortgage-related securities
may exhibit additional volatility. This is sometimes referred to
as extension risk. In addition, mortgage-related securities may
involve special risks relating to unanticipated rates of
prepayment on the mortgages underlying the securities. This is
sometimes referred to as prepayment risk. Declining interest rates
may tend to increase prepayments, and these prepayments would have
to be reinvested at the then-prevailing lower interest rates.
Therefore, an Underlying Fund that holds mortgage-related
securities may have less potential for capital appreciation during
periods of declining interest rates than Funds that invest in
other types of fixed income securities of similar maturities.
Prospectus 18
<PAGE>
Management Each Underlying Fund is subject to management risk because it is
Risk an actively managed investment portfolio. PIMCO Advisors, Pacific
Investment Management Company, and the sub-advisers and individual
portfolio managers of the Underlying Funds will apply investment
techniques and risk analyses in making investment decisions for
the Funds, but there can be no guarantee that they will produce
the desired results.
A Note on Each Portfolio may invest in PIMCO StocksPLUS Fund. While the
PIMCO investment objective of that Fund is to achieve a total return
StocksPLUS which exceeds the total return performance of the S&P 500 Index,
Fund it does so by investing substantially all of its assets in a
combination of equity-based (S&P 500 Index) derivative
instruments, backed by a portfolio of fixed income securities.
Consequently, the risks of investing in the Fund include
derivatives risk and the risks generally associated with the
Underlying Bond Funds. To the extent that the Fund invests in S&P
500 Index derivatives backed by a portfolio of fixed income
securities, under certain conditions, generally in a market where
the value of both S&P 500 Index derivatives and fixed income
securities are declining, the Fund may experience greater losses
than would be the case if it were to invest directly in a
portfolio of S&P 500 Index stocks.
19 PIMCO Funds: Multi-Manager Series
<PAGE>
Investment Objectives and Principal Investment Strategies
The investment objective and principal investment strategies of
each Portfolio are described below. There can be no assurance that
the investment objective of any Portfolio will be achieved.
Because the market value of each Portfolio's investments will
change, the net asset value per share of each Portfolio will also
vary.
The Portfolios are intended for investors who prefer to have
their asset allocation decisions made by professional money
managers. Each Portfolio seeks to achieve its investment objective
by investing within specified equity and fixed income ranges among
the Underlying Funds. Each Underlying Fund is a series of the
Trust or PIMCO Funds: Pacific Investment Management Series and is
managed by PIMCO Advisors and/or its affiliates.
Portfolio 90/10 Portfolio seeks long-term capital appreciation. Under normal
Descriptionsconditions, approximately 90% of the Portfolio's assets will be
allocated among Underlying Stock Funds and 10% among Underlying
Bond Funds.
60/40 Portfolio seeks long-term capital appreciation and current
income. Under normal conditions, approximately 60% of the
Portfolio's assets will be allocated among Underlying Stock Funds
and 40% among Underlying Bond Funds.
30/70 Portfolio seeks current income. Long-term capital
appreciation is a secondary objective. Under normal conditions,
approximately 30% of the Portfolio's assets will be allocated
among Underlying Stock Funds and 70% among Underlying Bond Funds.
PIMCO Advisors serves as the investment adviser to the
Portfolios. PIMCO Advisors' Asset Allocation Committee determines
how each Portfolio allocates and reallocates its assets among the
Underlying Funds according to the Portfolio's equity/fixed income
allocation targets and ranges. Please see "Asset Allocation
Strategies" in the Summary Information section above for a
description of the allocation strategies and techniques used by
the Committee. The table below illustrates the equity and fixed
income allocation targets and typical ranges for each Portfolio
under normal market conditions.
Equity and Fixed Income Targets and Ranges
(as a percentage of each Portfolio's total investments)
<TABLE>
<CAPTION>
Typical
PIMCO Funds Target Allocation
Asset Allocation Series Allocation Range
--------------------------------------------------------
<S> <C> <C>
90/10 Portfolio
Equity--Underlying Stock Funds 90% 80% - 100%
Fixed Income--Underlying Bond Funds* 10% 0% - 20%
--------------------------------------------------------
60/40 Portfolio
Equity--Underlying Stock Funds 60% 50% - 70%
Fixed Income--Underlying Bond Funds* 40% 30% - 50%
--------------------------------------------------------
30/70 Portfolio
Equity--Underlying Stock Funds 30% 25% - 35%
Fixed Income--Underlying Bond Funds* 70% 65% - 75%
</TABLE>
* The Fixed Income portion may include a money market component
through investments in PIMCO Money Market Fund.
Prospectus 20
<PAGE>
Each Portfolio invests all of its assets in Underlying Funds and
may invest in any or all of the Funds. However, it is expected
that a Portfolio will invest in only some of the Underlying Funds
at any particular time. A Portfolio's investment in a particular
Underlying Fund may exceed 25% of the Portfolio's total assets. To
the extent that a Portfolio invests a significant portion of its
assets in an Underlying Fund, it will be particularly sensitive to
the risks associated with that Fund. The particular Underlying
Funds in which each Portfolio may invest, the equity and fixed
income allocation targets and ranges specified above, and the
percentage of each Portfolio's assets invested from time to time
in any Underlying Fund or combination of Funds may be changed from
time to time without the approval of the Portfolio's shareholders.
Each Portfolio is also subject to certain investment restrictions
that are described under "Investment Restrictions" in the
Statement of Additional Information.
Equity The equity portion of each Portfolio will be allocated among a
Portion number of Underlying Stock Funds which represent a broad range of
of the equity-based asset classes and sub-classes and a variety of
Portfolios investment objectives and strategies. By allocating assets among
these Funds, the equity portions of the Portfolios can be
diversified in multiple ways, including the following:
By Investment Style/Category
.Growth
.Blend (Broad Market)
.Value
.Enhanced Index
.Sector-Related
By Region
.U.S. Equities
.International Developed Markets Equities
.International Emerging Markets Equities
By Size
.Large-Cap
.Mid-Cap
.Small-Cap
For a description of the Underlying Stock Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Fixed The fixed income portion of each Portfolio will be allocated among
Income a number of Underlying Bond Funds which represent a broad range of
Portion fixed income-based asset classes and sub-classes and a variety of
of the investment objectives and strategies. By allocating assets among
Portfolios these Funds, the fixed income portions of the Portfolios can be
diversified in multiple ways, including the following:
By Sector/Investment Specialty
.Governments
.Mortgages
.Corporate
.Inflation-Indexed
By Region
.U.S. Fixed Income
.Developed Foreign Fixed Income
.Emerging Markets Fixed Income
By Credit Quality
.Investment Grade/Money Market
.Medium Grade
.High Yield
By Duration
.Long-Term
.Intermediate-Term
.Short-Term
21 PIMCO Funds: Multi-Manager Series
<PAGE>
For a description of the Underlying Bond Funds and their
investment objectives and strategies, please see "Underlying
Funds."
Temporary In response to unfavorable market and other conditions, each
Defensive Portfolio may invest up to 100% of its assets in PIMCO Money
Strategies Market Fund (and may deviate from its asset allocation range) for
temporary defensive purposes. A Portfolio may also borrow money
for temporary or emergency purposes. These temporary strategies
would be inconsistent with the Portfolio's investment objective
and principal investment strategies and may adversely affect the
Portfolio's ability to achieve its investment objective.
Portfolio A change in the securities held by a Portfolio is known as
Turnover "portfolio turnover." Because PIMCO Advisors does not expect to
reallocate the Portfolios' assets among the Underlying Funds on a
frequent basis, the portfolio turnover rates for the Portfolios
are expected to be modest (i.e., less than 25%) in comparison to
most mutual funds. However, the Portfolios' indirectly bear the
expenses associated with portfolio turnover of the Underlying
Funds, a number of which have fairly high portfolio turnover rates
(i.e., in excess of 100%). High portfolio turnover involves
correspondingly greater expenses to an Underlying Fund, including
brokerage commissions or dealer mark-ups and other transaction
costs on the sale of securities and reinvestments in other
securities. Shareholders in the Portfolios may also bear expenses
directly or indirectly through sales of securities held by the
Portfolios and the Underlying Funds which result in realization of
taxable capital gains. To the extent such gains relate to
securities held for twelve months or less, such gains will be
short-term capital gains taxed at ordinary income tax rates when
distributed to shareholders who are individuals. The trading costs
and tax effects associated with portfolio turnover may adversely
affect a Portfolio's performance and the return to shareholders.
Changes The investment objective, equity/fixed income allocation targets
in and ranges, and, unless otherwise noted, other investment policies
Investment of each Portfolio described in this Prospectus may be changed by
Objectives the Board of Trustees without shareholder approval. If there is a
and change in a Portfolio's investment objective, allocation target or
Policies range, or other investment policies, shareholders should consider
whether the Portfolio remains an appropriate investment in light
of their then current financial positions and needs.
Prospectus 22
<PAGE>
Underlying Funds
Each Portfolio invests all of its assets in Underlying Funds.
Accordingly, each Portfolio's investment performance depends upon
a favorable allocation among the Underlying Funds as well as the
ability of the Underlying Funds to achieve their objectives. There
can be no assurance that the investment objective of any
Underlying Fund will be achieved. Shares of the Underlying Funds
are not offered in this Prospectus.
Advisory PIMCO Advisors serves as investment adviser for each of the
Arrangements Underlying Stock Funds, except that its affiliate, Pacific
for the Investment Management Company, is the sole investment adviser to
Underlying PIMCO StocksPLUS Fund. The PIMCO Equity Advisors division of PIMCO
Funds Advisors manages the investments of several of the Underlying
Stock Funds. PIMCO Advisors retains sub-advisory firms to manage
the portfolios of other Underlying Stock Funds. These firms
include Cadence Capital Management, NFJ Investment Group and
Parametric Portfolio Associates, each of which is an affiliate of
PIMCO Advisors, and Blairlogie Capital Management, which is not an
affiliate. Pacific Investment Management Company is the sole
investment adviser to each of the Underlying Bond Funds. For a
complete description of the advisory and sub-advisory arrangements
for the Underlying Funds, please see the Statement of Additional
Information and the Underlying Fund prospectuses, which are
incorporated herein by reference and are available free of charge
by telephoning the Distributor at 1-800-426-0107.
Underlying The following provides a concise description of the investment
Stock objective, main investments and other information about each
Funds Underlying Stock Fund. For a complete description of these Funds,
please see the Underlying Fund prospectuses, which are
incorporated herein by reference and are available free of charge
by telephoning the Distributor at 1-800-426-0107.
<TABLE>
<CAPTION>
Approximate Approximate
PIMCO Investment Main Number of Capitalization
Fund Objective Investments Holdings Range
----------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Growth Stock Growth Long-term growth of Common stocks of 35-40 At least $5 billion
Funds capital; companies with market
income is an capitalizations of at
incidental least $5 billion
consideration
--------------------------------------------------------------------------------------------------------
Target Capital appreciation; Common stocks of 40-60 Between $1 billion
no consideration companies with market and $10 billion
is given to capitalizations of
income between $1 billion and
$10 billion
--------------------------------------------------------------------------------------------------------
Opportunity Capital appreciation; Common stocks of 60-100 Between $100 million
no consideration companies with market and $2 billion
is given to capitalizations of
income between $100 million and
$2 billion
----------------------------------------------------------------------------------------------------------------------
Blend Stock Capital Appreciation Growth of capital Common stocks of 60-100 At least $1 billion
Funds companies with market
capitalizations of at
least $1 billion that
have improving
fundamentals and whose
stock is reasonably
valued by the market
--------------------------------------------------------------------------------------------------------
Mid-Cap Growth of capital Common stocks of 60-100 More than $500 million
companies with market (excluding the
capitalizations of more largest 200
than $500 million companies)
(excluding the largest
200 companies) that have
improving fundamentals
and whose stock is
reasonably valued by the
market
--------------------------------------------------------------------------------------------------------
Small-Cap Growth of capital Common stocks of 60-100 More than $100 million
companies with market (excluding the largest
capitalizations of more 1,000 companies)
than $100 million
(excluding the largest
1,000 companies) that
have improving
fundamentals and whose
stock is reasonably
valued by the market
--------------------------------------------------------------------------------------------------------
Micro-Cap Long-term growth of Common stocks of 60-100 Less than
capital companies with market $250 million
capitalizations of less
than $250 million that
have improving
fundamentals and whose
stock is reasonably
valued by the market
</TABLE>
23 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Approximate Approximate
PIMCO Investment Main Number of Capitalization
Fund Objective Investments Holdings Range
---------------------------------------------------------------------------------------------------------------------------
<C> <C> <C> <S> <C> <C>
Value Stock Equity Income Current income as a Income-producing common 40-50 More than $2 billion
Funds primary objective; stocks of companies
long-term growth of with market
capital as a capitalizations of more
secondary objective than $2 billion
-----------------------------------------------------------------------------------------------------------
Renaissance Long-term growth of Common stocks of 50-80 All capitalizations
capital companies with below-
and income average valuations
whose business
fundamentals are
expected to improve
-----------------------------------------------------------------------------------------------------------
Value Long-term growth of Common stocks of 40 More than $2 billion
capital companies with market
and income capitalizations of more
than $2 billion that
are undervalued
relative to the market
and their industry
groups
-----------------------------------------------------------------------------------------------------------
Small-Cap Value Long-term growth of Common stocks of 100 Between $100 million
capital companies with market and $1.5 billion
and income capitalizations of
between $100 million
and $1.5 billion and
below-average price-to-
earnings ratios
relative to the market
and their industry
groups
---------------------------------------------------------------------------------------------------------------------------
Enhanced Index Tax-Efficient Equity Maximum after-tax A broadly diversified More than More than $5 billion
Stock Funds growth of capital portfolio of at least 200
200 common stocks of
companies represented
in the S&P 500 Index
with market
capitalizations of more
than $5 billion
-----------------------------------------------------------------------------------------------------------
Enhanced Equity A total return which Common stocks 100-200 At least $5 billion
equals or exceeds the represented in the S&P
total return 500 Index with market
performance of an capitalizations of more
index (currently the than $5 billion
S&P 500 Index) that
represents the
performance of a
reasonably broad
spectrum of common
stocks that are
publicly traded in
the U.S.
-----------------------------------------------------------------------------------------------------------
StocksPLUS Total return that S&P 500 stock index N/A N/A
exceeds that derivatives backed by a
of the S&P 500 Index portfolio of short-term
fixed income securities
---------------------------------------------------------------------------------------------------------------------------
International International Capital appreciation Common stocks of 200-250 More than $500 million
Stock Funds through investment in foreign (non-U.S.)
an international issuers (developed and
portfolio; income is emerging markets)
an incidental with market
consideration capitalizations of more
than $500 million
-----------------------------------------------------------------------------------------------------------
International Growth Long-term capital An international 50-100 At least $2 billion
appreciation portfolio of
common stocks
-----------------------------------------------------------------------------------------------------------
Structured Emerging Long-term growth of Common stocks of More than All
Markets capital companies located in, 300 capitalizations
or whose business
relates to, emerging
markets
-----------------------------------------------------------------------------------------------------------
Tax-Efficient Structured Long-term growth of Common stocks of More than All
Emerging Markets capital. The Fund companies located in, 300 capitalizations
also seeks to achieve or whose business
superior after-tax relates to, emerging
returns for its markets
shareholders by using
a variety of tax-
efficient management
strategies
---------------------------------------------------------------------------------------------------------------------------
Sector-Related Innovation Innovation Capital appreciation; Common stocks of 40 More than $200 million
Stock Funds no technology-related
consideration is companies with market
given to income capitalizations of more
than $200 million
</TABLE>
Prospectus 24
<PAGE>
Underlying The investment objective of each Underlying Bond Fund (except as
Bond provided below) is to seek to realize maximum total return,
Funds consistent with preservation of capital and prudent investment
management. The "total return" sought by most of the Underlying
Bond Funds will consist of income earned on the Fund's
investments, plus capital appreciation, if any, which generally
arises from decreases in interest rates or improving credit
fundamentals for a particular sector or security. The investment
objective of PIMCO Real Return Bond Fund is to seek to realize
maximum real return, consistent with preservation of real capital
and prudent investment management. "Real return" is a measure of
the change in purchasing power of money invested in a particular
investment after adjusting for inflation. The investment objective
of each of PIMCO Money Market Fund and PIMCO Short-Term Fund is to
seek to obtain maximum current income, consistent with
preservation of capital and daily liquidity. PIMCO Money Market
Fund also attempts to maintain a stable net asset value of $1.00
per share, although there can be no assurance that it will be
successful in doing so.
The following provides a concise description of the main
investments of and other information relating to each Underlying
Bond Fund. For a complete description of these Funds, please see
the Underlying Fund prospectus for PIMCO Funds: Pacific Investment
Management Series, which is incorporated herein by reference and
is available free of charge by telephoning the Distributor at
1-800-426-0107.
<TABLE>
<CAPTION>
Non-U.S. Dollar
Denominated
PIMCO Fund Main Investments Duration Credit Quality(/1/) Securities(/2/)
--------------------------------------------------------------------------------------------------------
<C> <C> <S> <C> <C> <C>
Short Money Market Money market instruments less than or Min 95% Aaa or Prime 1; 0%
Duration Bond equal to 90 days less than or equal to
Funds dollar-weighted 5% Aa or Prime 2
average maturity
------------------------------------------------------------------------------------------
Short-Term Money market instruments 0-1 yr B to Aaa; max 10% 0-5%
and short maturity below Baa
fixed income
securities
------------------------------------------------------------------------------------------
Low Duration Short maturity fixed 1-3 yrs B to Aaa; max 10% 0-20%
income securities below Baa
--------------------------------------------------------------------------------------------------------
Intermediate Moderate Duration Short and intermediate 2-5 yrs B to Aaa; max 10% 0-20%
Duration maturity fixed income below Baa
Bond Funds securities
------------------------------------------------------------------------------------------
Total Return Intermediate maturity 3-6 yrs B to Aaa; max 10% 0-20%
fixed income securities below Baa
------------------------------------------------------------------------------------------
Total Return II Intermediate maturity 3-6 yrs Baa to Aaa 0%
fixed income securities
with quality
and foreign issuer
restrictions
--------------------------------------------------------------------------------------------------------
Long Duration Long-Term U.S. Long-term maturity fixed greater than or A to Aaa 0%
Bond Funds Government income securities equal to 8
years
--------------------------------------------------------------------------------------------------------
International Global Bond U.S. and foreign 3-7 yrs B to Aaa; max 10% 25-75%
Bond Funds intermediate below Baa
maturity fixed income
securities
------------------------------------------------------------------------------------------
Foreign Bond Intermediate maturity 3-7 yrs B to Aaa; max 10% greater than or
hedged foreign fixed below Baa equal to 85%
income securities
------------------------------------------------------------------------------------------
Emerging Markets Emerging market fixed 0-8 yrs B to Aaa greater than or
Bond income securities equal to 80%
--------------------------------------------------------------------------------------------------------
High Yield High Yield Higher yielding fixed 2-6 yrs B to Aaa; min 65% 0%
Bond Funds income securities below Baa
--------------------------------------------------------------------------------------------------------
Inflation Real Return Bond Inflation-indexed fixed N/A B to Aaa; max 10% 0-35%
Indexed Bond income securities below Baa
Funds
</TABLE>
1. As rated by Moody's Investors Service, Inc., or equivalently
rated by Standard & Poor's Rating Services, or if unrated, deter-
mined by Pacific Investment Management Company to be of compara-
ble quality.
2. Percentage limitations relate to non-U.S. dollar-denominated
securities for all Underlying Bond Funds except PIMCO Global
Bond, Foreign Bond and Emerging Markets Bond Funds. Percentage
limitations for these three Funds relate to securities of non-
U.S. issuers, denominated in any currency. Each Underlying Bond
Fund (except PIMCO Total Return II and Long-Term U.S. Government
Funds) may invest beyond these limits in U.S. dollar-denominated
securities of non-U.S. issuers.
Each Underlying Bond Fund invests at least 65% of its assets in
the following types of securities, which, unless provided above,
may be issued by domestic or foreign entities and denominated in
U.S. dollars or foreign currencies: securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities ("U.S. Government securities"); corporate debt
securities, including convertible securities and corporate
commercial paper; mortgage-backed and other asset-backed
securities; inflation-indexed bonds issued by both governments and
corporations; structured notes, including hybrid or "indexed"
securities, catastrophe bonds and loan participations; delayed
funding loans and revolving
25 PIMCO Funds: Multi-Manager Series
<PAGE>
credit facilities; bank certificates of deposit, fixed time
deposits and bankers' acceptances; repurchase agreements and
reverse repurchase agreements; debt securities issued by states or
local governments and their agencies, authorities and other
instrumentalities; obligations of foreign governments or their
subdivisions, agencies and instrumentalities; and obligations of
international agencies or supranational entities.
Other In addition to purchasing the securities listed above under "Main
Investment Investments," some or all of the Underlying Funds may to varying
Practices extents: lend portfolio securities; enter into repurchase
of the agreements and reverse repurchase agreements; purchase and sell
Underlying securities on a when-issued or delayed delivery basis; enter into
Funds forward commitments to purchase securities; purchase and write
call and put options on securities and securities indexes; enter
into futures contracts, options on futures contracts and swap
agreements; invest in foreign securities; and buy or sell foreign
currencies and enter into forward foreign currency contracts.
These and the other types of securities and investment techniques
used by the Underlying Funds all have attendant risks. The
Portfolios are indirectly subject to some or all of these risks to
varying degrees because they invest all of their assets in the
Underlying Funds. For further information concerning the
investment practices of and risks associated with the Underlying
Funds, please see "Investment Objectives and Policies" in the
Statement of Additional Information and the Underlying Fund
prospectuses, which are incorporated herein by reference and are
available free of charge by telephoning the Distributor at 1-800-
426-0107.
Additional In addition to the Funds listed above, a Portfolio may invest in
Underlying additional Underlying Funds, including those that may become
Funds available for investment in the future, at the discretion of PIMCO
Advisors and without shareholder approval.
Other Risk Information
Potential PIMCO Advisors has broad discretion to allocate and reallocate the
Conflicts Portfolios' assets among the Underlying Funds consistent with the
of Portfolios' investment objectives and policies and asset
Interest allocation targets and ranges. Although PIMCO Advisors does not
charge an investment advisory fee for its asset allocation
services, PIMCO Advisors and its affiliates indirectly receive
fees (including investment advisory and administrative fees) from
the Underlying Funds in which the Portfolios invest. In this
regard, PIMCO Advisors has a financial incentive to invest a
Portfolio's assets in Underlying Funds with higher fees than other
Funds, even if it believes that alternate investments would better
serve the Portfolio's investment program. PIMCO Advisors is
legally obligated to disregard that incentive in making asset
allocation decisions for the Portfolios. The Trustees and officers
of the Trust may also have conflicting interests in fulfilling
their fiduciary duties to both the Portfolios and the Underlying
Funds of the Trust.
Prospectus 26
<PAGE>
Management of the Portfolios
Investment PIMCO Advisors serves as the investment adviser and the
Adviser administrator (serving in its capacity as administrator, the
and "Administrator") for the Portfolios. Subject to the supervision of
Administrator the Board of Trustees, PIMCO Advisors is responsible for managing,
either directly or through others selected by it, the investment
activities of the Portfolios and the Portfolios' business affairs
and other administrative matters.
PIMCO Advisors is located at 800 Newport Center Drive, Newport
Beach, California 92660. Organized in 1987, PIMCO Advisors
provides investment management and advisory services to private
accounts of institutional and individual clients and to mutual
funds. As of December 31, 1999, PIMCO Advisors and its subsidiary
partnerships had more than $261 billion in assets under
management.
PIMCO Advisors has retained its affiliate, Pacific Investment
Management Company, to provide various administrative and other
services required by the Portfolios in its capacity as sub-
administrator. PIMCO Advisors and the sub-administrator may retain
other affiliates to provide certain of these services.
Asset PIMCO Advisors' Asset Allocation Committee is responsible for
Allocation determining how the Portfolios' assets are allocated and
Committee reallocated from time to time among the Underlying Funds. The
following provides information about the individuals who comprise
the Asset Allocation Committee and are primarily responsible for
making asset allocation and other investment decisions for the
Portfolios.
<TABLE>
<CAPTION>
Asset Allocation
Committee Member Since* Recent Professional Experience
---------------------------------------------------------------------------------------------
<S> <C> <C>
William D. Cvengros 1998 Chief Executive Officer, President and a Member of the Management
Board of PIMCO Advisors. Previously, he was Chairman of the Board
of Trustees and President of the Trust. He was a Director and the
Vice Chairman and Chief Investment Officer of Pacific Life
Insurance Company from January 1990 to November 1994.
Timothy R. Clark 1998 Vice President of PIMCO Advisors and a Senior Vice President of
PIMCO Funds Distributors LLC. Previously, he was President of
Katonah Capital Management, Inc. from July 1995 to December 1996
and served in various capacities at Zweig Advisors Inc. from
September 1989 to July 1995.
Robert S. Venable 1998 Vice President of PIMCO Advisors. Previously, he was a Vice
President and portfolio manager at Pacific Investment Management
Company from August 1992 to August 1996.
David Young 1998 Vice President and an Account Manager at Pacific Investment
Management Company. He has served in various capacities with
Pacific Investment Management Company and its affiliates since
January 1994. Previously, he was a Vice President and portfolio
manager at Analytic Investment Management, Inc. from September 1988
to January 1994.
</TABLE>
* Each individual has served on the Committee since the inception
of each Portfolio in September 1998.
It is expected that, on or about May 8, 2000, Messrs. Cvengros
and Venable will be replaced as members of the Asset Allocation
Committee by Kenneth W. Corba and John S. Loftus. Mr. Corba is a
Managing Director and Chief Investment Officer of the PIMCO Equity
Advisors division of PIMCO Advisors, and a member of the
Management Board of PIMCO Advisors. Prior to joining PIMCO
Advisors, he was with Eagle Asset Management from 1995 to 1998,
serving in various capacities including as Chief Investment
Officer and Portfolio Manager. He was with Stein Roe & Farnham
Inc. from 1984 to 1995. Mr. Loftus is a Managing Director of
Pacific Investment Management Company, where he is a senior member
of its investment strategy group. Mr. Loftus also heads the firm's
product management area. Mr. Loftus joined Pacific Investment
Management Company in 1986.
Advisory The Portfolios do not pay any fees to PIMCO Advisors under the
Fees Trust's investment advisory agreement in return for the advisory
and asset allocation services provided by PIMCO Advisors. The
Portfolios do, however, indirectly pay their proportionate share
of the advisory fees paid to PIMCO Advisors and Pacific Investment
Management Company by the Underlying Funds in which the Portfolios
invest. See "Underlying Fund Expenses" below.
Administrative
Fees
Each Portfolio pays for the administrative services it requires
under a fee structure which is essentially fixed. Class A, Class B
and Class C shareholders of each Portfolio pay an administrative
fee to PIMCO Advisors, computed as a percentage of the Portfolio's
assets attributable in the aggregate to those classes of shares.
PIMCO Advisors, in turn, provides or procures administrative
services for Class A, Class B and Class C shareholders and also
bears the costs of various third-party services required by the
Portfolios, including audit, custodial, portfolio accounting,
legal, transfer agency and printing costs.
The Portfolios were not operational for the entire fiscal year
ended June 30, 1999. Each Portfolio pays monthly administrative
fees to PIMCO Advisors at an annual rate of 0.40% based on the
average daily net assets attributable in the aggregate to the
Portfolio's Class A, Class B and Class C shares up to $2.5
billion, and 0.35% based on such average daily net assets in
excess of $2.5 billion. The Portfolios also indirectly pay their
proportionate share of the administrative fees charged by PIMCO
Advisors and
27 PIMCO Funds: Multi-Manager Series
<PAGE>
Pacific Investment Management Company to the Underlying Funds in
which the Portfolios invest. See "Underlying Fund Expenses" below.
Underlying The expenses associated with investing in a "fund of funds," such
Fund as the Portfolios, are generally higher than those for mutual
Expenses funds that do not invest primarily in other mutual funds. This is
because shareholders in a "fund of funds" indirectly pay a portion
of the fees and expenses charged at the underlying fund level.
The Portfolios are structured in the following ways to lessen
the impact of expenses incurred at the Underlying Fund level:
. The Portfolios do not pay any fees for asset allocation or
advisory services under the Trust's investment advisory
agreement.
. The Underlying Funds invest in Institutional Class shares of the
Underlying Funds, which are not subject to any sales charges or
12b-1 fees.
The following table summarizes the annual expenses borne by
Institutional Class shareholders of the Underlying Funds (based on
estimates for the current fiscal year). Because the Portfolios
invest in Institutional Class shares of the Underlying Funds,
shareholders of each Portfolio indirectly bear a proportionate
share of these expenses, depending upon how the Portfolio's assets
are allocated from time to time among the Underlying Funds. See
"Fees and Expenses of the Portfolio" in each Portfolio Summary
above.
<TABLE>
<CAPTION>
Annual Underlying Fund Expenses
(Based on the average daily net assets
attributable to a Fund's Institutional
Class shares):
Advisory Admini- Total Fund
Underlying Fund Fees strative Fees Operating Expenses
----------------------------------------------------------------
<S> <C> <C> <C>
PIMCO Growth 0.50% 0.25% 0.75%
----------------------------------------------------------------
PIMCO Target 0.55 0.25 0.80
----------------------------------------------------------------
PIMCO Opportunity 0.65 0.25 0.90
----------------------------------------------------------------
PIMCO Capital
Appreciation 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Mid-Cap 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Small-Cap 1.00 0.25 1.25
----------------------------------------------------------------
PIMCO Micro-Cap 1.25 0.25 1.50
----------------------------------------------------------------
PIMCO Equity Income 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Renaissance 0.60 0.25 0.85
----------------------------------------------------------------
PIMCO Value 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Small-Cap Value 0.60 0.25 0.85
----------------------------------------------------------------
PIMCO Tax-Efficient
Equity 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO Enhanced Equity 0.45 0.25 0.70
----------------------------------------------------------------
PIMCO StocksPLUS 0.40 0.25 0.65
----------------------------------------------------------------
PIMCO International 0.55 0.50 1.05
----------------------------------------------------------------
PIMCO International
Growth 0.85 0.50 1.35
----------------------------------------------------------------
PIMCO Structured Emerging
Markets 0.45 0.50 0.95
----------------------------------------------------------------
PIMCO Tax-Efficient
Structured Emerging
Markets 0.45 0.50 0.95
----------------------------------------------------------------
PIMCO Innovation 0.65 0.25 0.90
----------------------------------------------------------------
PIMCO Money Market 0.15 0.20 0.35
----------------------------------------------------------------
PIMCO Short-Term 0.25 0.20 0.45
----------------------------------------------------------------
PIMCO Low Duration 0.25 0.18 0.43
----------------------------------------------------------------
PIMCO Moderate Duration 0.25 0.20 0.45
----------------------------------------------------------------
PIMCO Total Return 0.25 0.18 0.43
----------------------------------------------------------------
PIMCO Total Return II 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Long-Term U.S.
Government 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Global Bond 0.25 0.30 0.55
----------------------------------------------------------------
PIMCO Foreign Bond 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Emerging Markets
Bond 0.45 0.40 0.85
----------------------------------------------------------------
PIMCO High Yield 0.25 0.25 0.50
----------------------------------------------------------------
PIMCO Real Return Bond 0.25 0.27 0.52
</TABLE>
Prospectus 28
<PAGE>
Distributor The Trust's Distributor is PIMCO Funds Distributors LLC, a wholly
owned subsidiary of PIMCO Advisors. The Distributor, located at
2187 Atlantic Street, Stamford, CT 06902, is a broker-dealer
registered with the Securities and Exchange Commission.
Investment Options -- Class A, B and C Shares
The Trust offers investors Class A, Class B and Class C shares of
each Portfolio in this Prospectus. Each class of shares is subject
to different types and levels of sales charges than the other
classes and bears a different level of expenses.
The class of shares that is best for you depends upon a number of
factors, including the amount and the intended length of your
investment. The following summarizes key information about each
class to help you make your investment decision, including the
various expenses associated with each class. More extensive
information about the Trust's multi-class arrangements is included
in the PIMCO Funds Shareholders' Guide for Class A, B and C Shares
(the "Guide"), which is included as part of the Statement of
Additional Information and can be obtained free of charge from the
Distributor. See "How to Buy and Sell Shares--PIMCO Funds
Shareholders' Guide" below.
Class A . You pay an initial sales charge of up to 5.50% when you buy
Shares Class A shares. The sales charge is deducted from your
investment so that not all of your purchase payment is
invested.
. You may be eligible for a reduction or a complete waiver of
the initial sales charge under a number of circumstances. For
example, you normally pay no sales charge if you purchase
$1,000,000 or more of Class A shares. Please see the Guide for
details.
. Class A shares are subject to lower 12b-1 fees than Class B or
Class C shares. Therefore, Class A shareholders generally pay
lower annual expenses and receive higher dividends than Class
B or Class C shareholders.
. You normally pay no contingent deferred sales charge ("CDSC")
when you redeem Class A shares, although you may pay a 1% CDSC
if you purchase $1,000,000 or more of Class A shares (and
therefore pay no initial sales charge) and then redeem the
shares during the first 18 months after your initial purchase.
The Class A CDSC is waived for certain categories of investors
and does not apply if you are otherwise eligible to purchase
Class A shares without a sales charge. Please see the Guide
for details.
Class B . You do not pay an initial sales charge when you buy Class B
Shares shares. The full amount of your purchase payment is invested
initially.
. You normally pay a CDSC of up to 5% if you redeem Class B
shares during the first six years after your initial purchase.
The amount of the CDSC declines the longer you hold your Class
B shares. You pay no CDSC if you redeem during the seventh year
and thereafter. The Class B CDSC is waived for certain
categories of investors. Please see the Guide for details.
. Class B shares are subject to higher 12b-1 fees than Class A
shares for the first seven years they are held. During this
time, Class B shareholders normally pay higher annual expenses
and receive lower dividends than Class A shareholders.
. Class B shares automatically convert into Class A shares after
they have been held for seven years. After the conversion takes
place, the shares are subject to the lower 12b-1 fees paid by
Class A shares.
Class C . You do not pay an initial sales charge when you buy Class C
Shares shares. The full amount of your purchase payment is invested
initially.
. You normally pay a CDSC of 1% if you redeem Class C shares
during the first year after your initial purchase. The Class C
CDSC is waived for certain categories of investors. Please see
the Guide for details.
. Class C shares are subject to higher 12b-1 fees than Class A
shares. Therefore, Class C shareholders normally pay higher
annual expenses and receive lower dividends than Class A
shareholders.
. Class C shares do not convert into any other class of shares.
Because Class B shares convert into Class A shares after seven
years, Class C shares will normally be subject to higher
expenses and will pay lower dividends than Class B shares if
the shares are held for more than seven years.
29 PIMCO Funds: Multi-Manager Series
<PAGE>
The following provides additional information about the sales
charges and other expenses associated with Class A, Class B and
Class C shares.
- --------------------------------------------------------------------------------
Initial Unless you are eligible for a waiver, the public offering price
Sales you pay when you buy Class A shares of the Portfolios is the net
Charges-- asset value ("NAV") of the shares plus an initial sales charge.
Class A The initial sales charge varies depending upon the size of your
Shares purchase, as set forth below. No sales charge is imposed where
Class A shares are issued to you pursuant to the automatic
reinvestment of income dividends or capital gains distributions.
90/10 Portfolio and 60/40 Portfolio
<TABLE>
<S> <C> <C>
Initial Sales Charge Initial Sales Charge
Amount of as % of Net as % of Public
Purchase Amount Invested Offering Price
---------------------------------------------------------------------
$0-$49,999 5.82% 5.50%
---------------------------------------------------------------------
$50,000-$99,999 4.71% 4.50%
---------------------------------------------------------------------
$100,000-$249,999 3.63% 3.50%
---------------------------------------------------------------------
$250,000-$499,999 2.56% 2.50%
---------------------------------------------------------------------
$500,000-$999,999 2.04% 2.00%
---------------------------------------------------------------------
$1,000,000 + 0.00%* 0.00%*
---------------------------------------------------------------------
</TABLE>
30/70 Portfolio
<TABLE>
<S> <C> <C>
Initial Sales Charge Initial Sales Charge
Amount of as % of Net as % of Public
Purchase Amount Invested Offering Price
---------------------------------------------------------------------
$0-$49,999 4.71% 4.50%
---------------------------------------------------------------------
$50,000-$99,999 4.17% 4.00%
---------------------------------------------------------------------
$100,000-$249,999 3.63% 3.50%
---------------------------------------------------------------------
$250,000-$499,999 2.56% 2.50%
---------------------------------------------------------------------
$500,000-$999,999 2.04% 2.00%
---------------------------------------------------------------------
$1,000,000 + 0.00%* 0.00%*
---------------------------------------------------------------------
</TABLE>
*As shown, investors that purchase $1,000,000 or more of any
Portfolio's Class A shares will not pay any initial sales charge
on the purchase. However, purchasers of $1,000,000 or more of
Class A shares may be subject to a CDSC of 1% if the shares are
redeemed during the first 18 months after their purchase. See
"CDSCs on Class A Shares" below.
- --------------------------------------------------------------------------------
Contingent Unless you are eligible for a waiver, if you sell (redeem) your
Deferred Class B or Class C shares within the time periods specified below,
Sales you will pay a CDSC according to the following schedules.
Charges
(CDSCs)
- -- Class
B and
Class C
Shares
Class B <TABLE>
Shares
<S> <C> <C>
Years Since Purchase Percentage Contingent
Payment was Made Deferred Sales Charge
-----------------------------------------------------------------------------
First 5
-----------------------------------------------------------------------------
Second 4
-----------------------------------------------------------------------------
Third 3
-----------------------------------------------------------------------------
Fourth 3
-----------------------------------------------------------------------------
Fifth 2
-----------------------------------------------------------------------------
Sixth 1
-----------------------------------------------------------------------------
Seventh 0*
-----------------------------------------------------------------------------
*After the seventh year, Class B shares convert into Class A
shares.
Class C
Shares
Years Since Purchase Percentage Contingent
Payment was Made Deferred Sales Charge
-----------------------------------------------------------------------------
First 1
-----------------------------------------------------------------------------
Thereafter 0
-----------------------------------------------------------------------------
</TABLE>
Prospectus 30
<PAGE>
- --------------------------------------------------------------------------------
CDSCs on Unless a waiver applies, investors who purchase $1,000,000 or more
Class A of Class A shares (and, thus, pay no initial sales charge) will be
Shares subject to a 1% CDSC if the shares are redeemed within 18 months
of their purchase. The Class A CDSC does not apply if you are
otherwise eligible to purchase Class A shares without an initial
sales charge or if you are eligible for a waiver of the CDSC. See
"Reductions and Waivers of Initial Sales Charges and CDSCs" below.
- --------------------------------------------------------------------------------
How CDSCs A CDSC is imposed on redemptions of Class B and Class C shares
are (and where applicable, Class A shares) on the amount of the
Calculated redemption which causes the current value of your account for the
particular class of shares of a Portfolio to fall below the total
dollar amount of your purchase payments subject to the CDSC.
However, no CDSC is imposed if the shares redeemed have been
acquired through the reinvestment of dividends or capital gains
distributions or if the amount redeemed is derived from increases
in the value of your account above the amount of the purchase
payments subject to the CDSC. CDSCs are deducted from the proceeds
of your redemption, not from amounts remaining in your account. In
determining whether a CDSC is payable, it is assumed that the
purchase payment from which the redemption is made is the earliest
purchase payment for the particular class of shares in your
account (from which a redemption or exchange has not already been
effected).
For instance, the following example illustrates the operation of
the Class B CDSC:
. Assume that an individual opens an account and makes a
purchase payment of $10,000 for Class B shares of a Portfolio
and that six months later the value of the investor's account
for that Portfolio has grown through investment performance
and reinvestment of distributions to $11,000. The investor
then may redeem up to $1,000 from that Portfolio ($11,000
minus $10,000) without incurring a CDSC. If the investor
should redeem $3,000, a CDSC would be imposed on $2,000 of
the redemption (the amount by which the investor's account
for the Portfolio was reduced below the amount of the
purchase payment). At the rate of 5%, the Class B CDSC would
be $100.
In determining whether an amount is available for redemption
without incurring a CDSC, the purchase payments made for all
shares of a particular class of a Portfolio in the shareholder's
account are aggregated, and the current value of all such shares
is aggregated.
- --------------------------------------------------------------------------------
Reductions The initial sales charges on Class A shares and the CDSCs on Class
and A, Class B and Class C shares may be reduced or waived under
Waivers certain purchase arrangements and for certain categories of
of investors. Please see the Guide for details. The Guide is
Initial available free of charge from the Distributor. See "How to Buy and
Sales Sell Shares--PIMCO Funds Shareholders' Guide" below.
Charges
and CDSCs
- --------------------------------------------------------------------------------
DistributionThe Portfolios pay fees to the Distributor on an ongoing basis as
and compensation for the services the Distributor renders and the
Servicing expenses it bears in connection with the sale and distribution of
(12b-1) Portfolio shares ("distribution fees") and/or in connection with
Plans personal services rendered to Portfolio shareholders and the
maintenance of shareholder accounts ("servicing fees"). These
payments are made pursuant to Distribution and Servicing Plans
("12b-1 Plans") adopted by each Portfolio pursuant to Rule 12b-1
under the Investment Company Act of 1940.
There is a separate 12b-1 Plan for each class of shares offered
in this Prospectus. Class A shares pay only servicing fees. Class
B and Class C shares pay both distribution and servicing fees. The
following lists the maximum annual rates at which the distribution
and/or servicing fees may be paid under each 12b-1 Plan
(calculated as a percentage of each Portfolio's average daily net
assets attributable to the particular class of shares):
<TABLE>
<S> <C> <C>
Servicing Distribution
All Portfolios Fee Fee
--------------------------------------------------------------------------------
Class A 0.25% None
--------------------------------------------------------------------------------
Class B 0.25% 0.75%
--------------------------------------------------------------------------------
Class C 0.25% 0.75%
--------------------------------------------------------------------------------
</TABLE>
Because 12b-1 fees are paid out of a Portfolio's assets on an
ongoing basis, over time these fees will increase the cost of your
investment and may cost you more than sales charges which are
deducted at the time of investment. Therefore, although Class B
and Class C shares do not pay initial sales charges, the
distribution fees payable on Class B and Class C shares may, over
time, cost you more than the initial sales charge imposed on Class
A shares. Also, because Class B shares convert into Class A shares
after they have been held for seven years and are not subject to
distribution fees after the conversion, an investment in Class C
shares may cost you more over time than an investment in Class B
shares.
31 PIMCO Funds: Multi-Manager Series
<PAGE>
How Portfolio Shares Are Priced
The net asset value ("NAV") of a Portfolio's Class A, Class B and
Class C shares is determined by dividing the total value of a
Portfolio's portfolio investments and other assets attributable to
that class, less any liabilities, by the total number of shares
outstanding of that class.
The assets of each Portfolio consist of shares of the Underlying
Funds, which are valued at their respective NAVs at the time of
valuation of the Portfolios' shares. For purposes of calculating
the NAV of Underlying Fund shares, portfolio securities and other
assets of the Funds for which market quotes are available are
stated at market value. Market value is generally determined on
the basis of last reported sales prices, or if no sales are
reported, based on quotes obtained from a quotation reporting
system, established market makers, or pricing services. Certain
securities or investments for which daily market quotes are not
readily available may be valued, pursuant to guidelines
established by the Board of Trustees of the Underlying Fund, with
reference to other securities or indices. Short-term investments
having a maturity of 60 days or less are generally valued at
amortized cost. Exchange traded options, futures and options on
futures are valued at the settlement price determined by the
exchange. Other securities for which market quotes are not readily
available are valued at fair value as determined in good faith by
the Fund's Board of Trustees or persons acting at the Board's
direction.
Underlying Fund investments initially valued in currencies other
than the U.S. dollar are converted to U.S. dollars using exchange
rates obtained from pricing services. As a result, the NAV of an
Underlying Fund's shares may be affected by changes in the value
of currencies in relation to the U.S. dollar. The value of
securities traded in markets outside the United States or
denominated in currencies other than the U.S. dollar may be
affected significantly on a day that the New York Stock Exchange
is closed. As a result, to the extent that a Portfolio invests in
Underlying Funds that hold foreign securities, the NAV of the
Portfolio's shares may change at times when you can not purchase,
redeem or exchange shares.
Portfolio and Underlying Fund shares are valued at the close of
regular trading (normally 4:00 p.m., Eastern time) (the "NYSE
Close") on each day that the New York Stock Exchange is open. For
purposes of calculating the NAV, the Underlying Funds normally use
pricing data for domestic equity securities received shortly after
the NYSE Close and do not normally take into account trading,
clearances or settlements that take place after the NYSE Close.
Domestic fixed income and foreign securities are normally priced
using data reflecting the earlier closing of the principal markets
for those securities. Information that becomes known to the
Underlying Funds or their agents after the NAV has been calculated
on a particular day will not generally be used to retroactively
adjust the price of a security or the NAV determined earlier that
day.
In unusual circumstances, instead of valuing securities in the
usual manner, the Underlying Funds may value securities at fair
value or estimate their value as determined in good faith by the
Fund's Board of Trustees pursuant to procedures approved by the
Board of Trustees. Fair valuation may also be used by the
Underlying Fund's Board of Trustees if extraordinary events occur
after the close of the relevant market but prior to the NYSE
Close.
How to Buy and Sell Shares
The following section provides basic information about how to buy,
sell (redeem) and exchange shares of the Portfolios.
PIMCO
Funds
Shareholders'
Guide
More detailed information about the Trust's purchase, sale and
exchange arrangements for Portfolio shares is provided in the
PIMCO Funds Shareholders' Guide, which is included in the
Statement of Additional Information and can be obtained free of
charge from the Distributor by written request or by calling 1-
800-426-0107. The Guide provides technical information about the
basic arrangements described below and also describes special
purchase, sale and exchange features and programs offered by the
Trust, including:
. Automated telephone and wire transfer procedures
. Automatic purchase, exchange and withdrawal programs
. Programs that establish a link from your Portfolio account to
your bank account
. Special arrangements for tax-qualified retirement plans
. Investment programs which allow you to reduce or eliminate the
initial sales charges on Class A shares
. Categories of investors that are eligible for waivers or
reductions of initial sales charges and CDSCs
Prospectus 32
<PAGE>
Calculation When you buy shares of the Portfolios, you pay a price equal to
of Share the NAV of the shares, plus any applicable sales charge. When you
Price and sell (redeem) shares, you receive an amount equal to the NAV of
Redemption the shares, minus any applicable CDSC. NAVs are determined at the
Payments close of regular trading (normally, 4:00 p.m., Eastern time) on
the New York Stock Exchange on each day the New York Stock
Exchange is open. See "How Portfolio Shares Are Priced" above for
details. Generally, purchase and redemption orders for Portfolio
shares are processed at the NAV next calculated after your order
is received by the Distributor. There are certain exceptions where
an order is received by a broker or dealer prior to the close of
regular trading on the New York Stock Exchange and then
transmitted to the Distributor after the NAV has been calculated
for that day (in which case the order may be processed at that
day's NAV). Please see the Guide for details.
The Trust does not calculate NAVs or process orders on days when
the New York Stock Exchange is closed. If your purchase or
redemption order is received by the Distributor on a day when the
New York Stock Exchange is closed, it will be processed on the
next succeeding day when the New York Stock Exchange is open (at
the succeeding day's NAV).
Buying You can buy Class A, Class B or Class C shares of the Portfolios
Shares in the following ways:
. Through your broker, dealer or other financial intermediary.
Your broker, dealer or other intermediary may establish higher
minimum investment requirements than the Trust and may also
independently charge you transaction fees and additional amounts
(which may vary) in return for its services, which will reduce
your return. Shares you purchase through your broker, dealer or
other intermediary will normally be held in your account with that
firm.
. Directly from the Trust. To make direct investments, you must
open an account with the Distributor and send payment for your
shares either by mail or through a variety of other purchase
options and plans offered by the Trust.
If you wish to invest directly by mail, please send a check
payable to PIMCO Funds Distributors LLC, along with a completed
application form to:
PIMCO Funds Distributors LLC
P.O. Box 9688
Providence, RI 02940-0926
The Trust accepts all purchases by mail subject to collection of
checks at full value and conversion into federal funds. You may
make subsequent purchases by mailing a check to the address above
with a letter describing the investment or with the additional
investment portion of a confirmation statement. Checks for
subsequent purchases should be payable to PIMCO Funds Distributors
LLC and should clearly indicate your account number. Please call
the Distributor at 1-800-426-0107 if you have any questions
regarding purchases by mail.
The Guide describes a number of additional ways you can make
direct investments, including through the PIMCO Funds Auto-Invest
and PIMCO Funds Fund Link programs. You can obtain a Guide free of
charge from the Distributor by written request or by calling 1-
800-426-0107. See "PIMCO Funds Shareholders' Guide" above.
The Distributor, in its sole discretion, may accept or reject any
order for purchase of Portfolio shares. No share certificates will
be issued unless specifically requested in writing.
Investment The following investment minimums apply for purchases of Class A,
Minimums Class B and Class C shares:
<TABLE>
<CAPTION>
Initial Investment Subsequent Investments
------------------ ----------------------
<S> <C>
$2,500 per Portfolio $100 per Portfolio
</TABLE>
Lower minimums may apply for certain categories of investors,
including certain tax-qualified retirement plans, and for special
investment programs and plans offered by the Trust, such as the
PIMCO Funds Auto-Invest and PIMCO Funds Fund Link programs. Please
see the Guide for details.
Small
Account
Fee
Because of the disproportionately high costs of servicing accounts
with low balances, if you have a direct account with the
Distributor, you will be charged a fee at the annual rate of $16
if your account balance for any Portfolio falls below a minimum
level of $2,500, except for Uniform Gift to Minors, IRA, Roth IRA
and Auto-Invest accounts for which the limit is $1,000. The fee
also applies to employer-sponsored retirement plan accounts, Money
Purchase and/or Profit Sharing plans, 401(k) plans, 403(b)(7)
custodial accounts, SIMPLE IRAs, SEPs and SAR/SEPs. (A separate
custodial fee may
33 PIMCO Funds: Multi-Manager Series
<PAGE>
apply to IRAs, Roth IRAs and other retirement accounts.) However,
you will not be charged this fee if the aggregate value of all of
your PIMCO Funds accounts is at least $50,000. Any applicable
small account fee will be deducted automatically from your below-
minimum Portfolio account in quarterly installments and paid to
the Administrator. Each Portfolio account will normally be valued,
and any deduction taken, during the last five business days of
each calendar quarter. Lower minimum balance requirements and
waivers of the small account fee apply for certain categories of
investors. Please see the Guide for details.
Minimum Due to the relatively high cost to the Portfolios of maintaining
Account small accounts, you are asked to maintain an account balance in
Size each Portfolio in which you invest of at least the minimum
investment necessary to open the particular type of account. If
your balance for any Portfolio remains below the minimum for three
months or longer, the Administrator has the right (except in the
case of employer-sponsored retirement accounts) to redeem your
remaining shares and close that Portfolio account after giving you
60 days to increase your balance. Your Portfolio account will not
be liquidated if the reduction in size is due solely to a decline
in market value of your Portfolio shares or if the aggregate value
of all your PIMCO Funds accounts exceeds $50,000.
Exchanging You may exchange your Class A, Class B or Class C shares of any
Shares Portfolio for the same Class of shares of any other Portfolio or
of another series of the Trust or PIMCO Funds: Pacific Investment
Management Series, subject to any restrictions on exchanges set
forth in the applicable fund's or series' prospectus(es). Shares
are exchanged on the basis of their respective NAVs next
calculated after your exchange order is received by the
Distributor. Currently, the Trust does not charge any exchange
fees or charges. Exchanges are subject to the $2,500 minimum
initial purchase requirements for each Portfolio, except with
respect to tax-qualified programs and exchanges effected through
the PIMCO Funds Auto-Exchange plan. In addition, an exchange is
generally a taxable event which will generate capital gains or
losses, and special rules may apply in computing tax basis when
determining gain or loss. If you maintain your account with the
Distributor, you may exchange shares by completing a written
exchange request and sending it to PIMCO Funds Distributors LLC,
P.O. Box 9688, Providence, RI 02940-0926. You can get an exchange
form by calling the Distributor at 1-800-426-0107.
The Trust reserves the right to refuse exchange purchases if, in
the judgment of PIMCO Advisors, the purchase would adversely
affect a Portfolio and its shareholders. In particular, a pattern
of exchanges characteristic of "market-timing" strategies may be
deemed by PIMCO Advisors to be detrimental to the Trust or a
particular Portfolio. Currently, the Trust limits the number of
"round trip" exchanges an investor may make. An investor makes a
"round trip" exchange when the investor purchases shares of a
particular Portfolio, subsequently exchanges those shares for
shares of a different PIMCO Fund and then exchanges back into the
originally purchased Portfolio. The Trust has the right to refuse
any exchange for any investor who completes (by making the
exchange back into the shares of the originally purchased
Portfolio) more than six round trip exchanges in any twelve-month
period. Although the Trust has no current intention of terminating
or modifying the exchange privilege other than as set forth in the
preceeding sentence, it reserves the right to do so at any time.
Except as otherwise permitted by the Securities and Exchange
Commission, the Trust will give you 60 days' advance notice if it
exercises its right to terminate or materially modify the exchange
privilege with respect to Class A, B and C shares.
The Guide provides more detailed information about the exchange
privilege, including the procedures you must follow and additional
exchange options. You can obtain a Guide free of charge from the
Distributor by written request or by calling 1-800-426-0107. See
"PIMCO Funds Shareholders' Guide" above.
Selling You can sell (redeem) Class A, Class B or Class C shares of the
Shares Portfolios in the following ways:
. Through your broker, dealer or other financial intermediary.
Your broker, dealer or other intermediary may independently charge
you transaction fees and additional amounts (which may vary) in
return for its services, which will reduce your return.
. Directly from the Trust by Written Request. To redeem shares
directly from the Trust by written request (whether or not the
shares are represented by certificates), you must send the
following items to the Trust's Transfer Agent, PFPC, Inc., P.O.
Box 9688, Providence, RI 02940-0926:
(1) a written request for redemption signed by all registered
owners exactly as the account is registered on the Transfer
Agent's records, including fiduciary titles, if any, and
specifying the account number and the dollar amount or number of
shares to be redeemed;
Prospectus 34
<PAGE>
(2) for certain redemptions described below, a guarantee of all
signatures on the written request or on the share certificate or
accompanying stock power, if required, as described under
"Signature Guarantee" below;
(3) any share certificates issued for any of the shares to be
redeemed (see "Certificated Shares" below); and
(4) any additional documents which may be required by the
Transfer Agent for redemption by corporations, partnerships or
other organizations, executors, administrators, trustees,
custodians or guardians, or if the redemption is requested by
anyone other than the shareholder(s) of record. Transfers of
shares are subject to the same requirements.
A signature guarantee is not required for redemptions requested
by and payable to all shareholders of record for the account, and
to be sent to the address of record for that account. To avoid
delay in redemption or transfer, if you have any questions about
these requirements you should contact the Transfer Agent in
writing or call 1-800-426-0107 before submitting a request.
Written redemption or transfer requests will not be honored until
all required documents in the proper form have been received by
the Transfer Agent. You can not redeem your shares by written
request to the Trust if they are held in broker "street name"
accounts--you must redeem through your broker.
If the proceeds of your redemption (i) are to be paid to a person
other than the record owner, (ii) are to be sent to an address
other than the address of the account on the Transfer Agent's
records, and/or (iii) are to be paid to a corporation,
partnership, trust or fiduciary, the signature(s) on the
redemption request and on the certificates, if any, or stock power
must be guaranteed as described under "Signature Guarantee" below.
The Distributor may, however, waive the signature guarantee
requirement for redemptions up to $2,500 by a trustee of a
qualified retirement plan, the administrator for which has an
agreement with the Distributor.
The Guide describes a number of additional ways you can redeem
your shares, including:
. Telephone requests to the Transfer Agent
. PIMCO Funds Automated Telephone System (ATS)
. Expedited wire transfers
. Automatic Withdrawal Plan
. PIMCO Funds Fund Link
Unless you specifically elect otherwise, your initial account
application permits you to redeem shares by telephone subject to
certain requirements. To be eligible for ATS, expedited wire
transfer, Automatic Withdrawal Plan, and Fund Link privileges, you
must specifically elect the particular option on your account
application and satisfy certain other requirements. The Guide
describes each of these options and provides additional
information about selling shares. You can obtain a Guide free of
charge from the Distributor by written request or by calling 1-
800-426-0107.
Other than an applicable CDSC, you will not pay any special fees
or charges to the Trust or the Distributor when you sell your
shares. However, if you sell your shares through your broker,
dealer or other financial intermediary, that firm may charge you a
commission or other fee for processing your redemption request.
Redemptions of Portfolio shares may be suspended when trading on
the New York Stock Exchange is restricted or during an emergency
which makes it impracticable for the Portfolios or the Underlying
Funds to dispose of their securities or to determine fairly the
value of their net assets, or during any other period as permitted
by the Securities and Exchange Commission for the protection of
investors. Under these and other unusual circumstances, the Trust
may suspend redemptions or postpone payments for more than seven
days, as permitted by law.
Timing of
Redemption
Payments
Redemption proceeds will normally be mailed to the redeeming
shareholder within seven calendar days or, in the case of wire
transfer or Fund Link redemptions, sent to the designated bank
account within one business day. Fund Link redemptions may be
received by the bank on the second or third business day. In cases
where shares have recently been purchased by personal check,
redemption proceeds may be withheld until the check has been
collected, which may take up to 15 days. To avoid such
withholding, investors should purchase shares by certified or bank
check or by wire transfer. Under unusual circumstances, the Trust
may delay your redemption payments for more than seven days, as
permitted by law.
35 PIMCO Funds: Multi-Manager Series
<PAGE>
Redemptions The Trust has agreed to redeem shares of each Portfolio solely in
In Kind cash up to the lesser of $250,000 or 1% of the Portfolio's net
assets during any 90-day period for any one shareholder. In
consideration of the best interests of the remaining shareholders,
the Trust may pay any redemption proceeds exceeding this amount in
whole or in part by a distribution in kind of securities held by a
Portfolio in lieu of cash. If your shares are redeemed in kind,
you may incur transaction costs upon the disposition of the
securities received in the distribution.
CertificatedIf you are redeeming shares for which certificates have been
Shares issued, the certificates must be mailed to or deposited with the
Trust, duly endorsed or accompanied by a duly endorsed stock power
or by a written request for redemption. Signatures must be
guaranteed as described under "Signature Guarantee" below. The
Trust may request further documentation from institutions or
fiduciary accounts, such as corporations, custodians (e.g., under
the Uniform Gifts to Minors Act), executors, administrators,
trustees or guardians. Your redemption request and stock power
must be signed exactly as the account is registered, including
indication of any special capacity of the registered owner.
Signature When a signature guarantee is called for, you should have
Guarantee "Signature Guaranteed" stamped under your signature and guaranteed
by any of the following entities: U.S. banks, foreign banks having
a U.S. correspondent bank, credit unions, savings associations,
U.S. registered dealers and brokers, municipal securities dealers
and brokers, government securities dealers and brokers, national
securities exchanges, registered securities associations and
clearing agencies (each an "Eligible Guarantor Institution"). The
Distributor reserves the right to reject any signature guarantee
pursuant to its written signature guarantee standards or
procedures, which may be revised in the future to permit it to
reject signature guarantees from Eligible Guarantor Institutions
that do not, based on credit guidelines, satisfy such written
standards or procedures. The Trust may change the signature
guarantee requirements from time to time upon notice to
shareholders, which may be given by means of a new or supplemented
Prospectus.
Portfolio Distributions
Each Portfolio distributes substantially all of its net investment
income to shareholders in the form of dividends. You begin earning
dividends on Portfolio shares the day after the Trust receives
your purchase payment. Dividends paid by each Portfolio with
respect to each class of shares are calculated in the same manner
and at the same time, but dividends on Class B and Class C shares
are expected to be lower than dividends on Class A shares as a
result of the distribution fees applicable to Class B and Class C
shares. The following shows when each Portfolio intends to declare
and distribute income dividends to shareholders of record.
<TABLE>
<CAPTION>
Portfolio At Least Annually Quarterly Monthly
---------------------------------------------------------------------------
<S> <C> <C> <C>
90/10 Portfolio .
---------------------------------------------------------------------------
60/40 Portfolio .
---------------------------------------------------------------------------
30/70 Portfolio .
---------------------------------------------------------------------------
</TABLE>
In addition, each Portfolio distributes any net capital gains it
earns from the sale of portfolio securities to shareholders no
less frequently than annually. Net short-term capital gains may be
paid more frequently.
You can choose from the following distribution options:
. Reinvest all distributions in additional shares of the same
class of your Portfolio at NAV. This will be done unless you
elect another option.
. Invest all distributions in shares of the same class of any
other Portfolio or another series of the Trust or PIMCO Funds:
Pacific Investment Management Series which offers that class at
NAV. You must have an account existing in the Portfolio or
series selected for investment with the identical registered
name. You must elect this option on your account application or
by a telephone request to the Transfer Agent at 1-800-426-0107.
. Receive all distributions in cash (either paid directly to you
or credited to your account with your broker or other financial
intermediary). You must elect this option on your account
application or by a telephone request to the Transfer Agent at
1-800-426-0107.
Prospectus 36
<PAGE>
You do not pay any sales charges on shares you receive through
the reinvestment of Portfolio distributions.
If you elect to receive Portfolio distributions in cash and the
postal or other delivery service is unable to deliver checks to
your address of record, the Trust's Transfer Agent will hold the
returned checks for your benefit in a non-interest bearing
account.
For further information on distribution options, please contact
your broker or call the Distributor at 1-800-426-0107.
Tax Consequences
. Taxes on Portfolio distributions. If you are subject to U.S.
federal income tax, you will be subject to tax on Portfolio
distributions whether you received them in cash or reinvested them
in additional shares. For federal income tax purposes, Portfolio
distributions will be taxable to you as either ordinary income or
capital gains.
Portfolio dividends (i.e., distributions of investment income)
are taxable to you as ordinary income. Federal taxes on Portfolio
distributions of gains are determined by how long the Portfolio
owned the investments that generated the gains, rather than how
long you have owned your shares. Distributions of gains from
investments that a Portfolio owned for more than 12 months will
generally be taxable to you as capital gains. Distributions of
gains from investments that the Portfolio owned for 12 months or
less will generally be taxable to you as ordinary income.
Portfolio distributions are taxable to you even if they are paid
from income or gains earned by a Portfolio prior to your
investment and thus were included in the price you paid for your
shares. For example, if you purchase shares on or just before the
record date of a Portfolio distribution, you will pay full price
for the shares and may receive a portion of your investment back
as a taxable distribution.
The Portfolios' use of a fund of funds structure could affect the
amount, timing and character of distributions to shareholders. See
"Taxation--Distributions" in the Statement of Additional
Information.
. Taxes when you sell (redeem) or exchange your shares. Any gain
resulting from the sale of Portfolio shares will generally be
subject to federal income tax. When you exchange shares of a
Portfolio for shares of another Portfolio or series of the Trust,
the transaction will be treated as a sale of the first Portfolio's
shares for these purposes, and any gain on those shares will
generally be subject to federal income tax.
This section relates only to federal income tax consequences of
investing in the Portfolios; the consequences under other tax laws
may differ. You should consult your tax advisor as to the possible
application of foreign, state and local income tax laws to
Portfolio dividends and capital distributions. Please see the
Statement of Additional Information for additional information
regarding the tax aspects of investing in the Portfolios.
37 PIMCO Funds: Multi-Manager Series
<PAGE>
(This page left blank intentionally)
Prospectus 38
<PAGE>
Financial Highlights
The financial highlights table is intended to help you understand
the financial performance of Class A, Class B and Class C shares
of each Portfolio since the class of shares was first offered.
Certain information reflects financial results for a single
Portfolio share. The total returns in the table represent the rate
that an investor would have earned or lost on an investment in a
particular class of shares of a Portfolio, assuming reinvestment
of all dividends and distributions. This information has been
audited by PricewaterhouseCoopers LLP, whose report, along with
each Portfolio's financial statements, are included in the Trust's
annual report to shareholders. The annual report is incorporated
by reference in the Statement of Additional Information and is
available free of charge upon request from the Distributor.
<TABLE>
<CAPTION>
Year or Net Realized/ Dividends Dividends in
Period Net Asset Value Net Unrealized Total Income From Net Excess of Net
Ended Beginning Investment Gain (Loss) on From Investment Investment Investment
of Period Income (Loss) Investments Operations Income Income
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
90/10 Portfolio
Class A
09/30/98-06/30/99 $10.00 $0.16(a) $2.19(a) $2.35 $(0.15) $(0.03)
Class B
09/30/98-06/30/99 10.00 0.16(a) 2.13(a) 2.29 (0.15) (0.03)
Class C
09/30/98-06/30/99 10.00 0.07(a) 2.22(a) 2.29 (0.15) (0.03)
60/40 Portfolio
Class A
09/30/98-06/30/99 $10.00 $0.31(a) $1.23(a) $1.54 $(0.27) $0.00
Class B
09/30/98-06/30/99 10.00 0.16(a) 1.31(a) 1.47 (0.22) 0.00
Class C
09/30/98-06/30/99 10.00 0.18(a) 1.29(a) 1.47 (0.23) 0.00
30/70 Portfolio
Class A
09/30/98-06/30/99 $10.00 $0.58(a) $0.11(a) $0.69 $(0.36) $0.00
Class B
09/30/98-06/30/99 10.00 0.32(a) 0.31(a) 0.63 (0.31) 0.00
Class C
09/30/98-06/30/99 10.00 0.26(a) 0.36(a) 0.62 (0.32) 0.00
</TABLE>
- -------
* Annualized
(a) Per share amounts based upon average number of shares outstanding during
the period.
39 PIMCO Funds: Multi-Manager Series
<PAGE>
<TABLE>
<CAPTION>
Ratio of Net
Ratio of Investment
Net Asset Expenses to Income (Loss) to
Total Value End of Net Assets End Average Net Average Net Portfolio
Ditributionss Period Total Return of Period (000s) Assets Assets Turnover Rate
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
$(0.18) $12.17 23.69% $ 647 0.65%* 1.91%* 48%
(0.18) 12.11 23.03 1,920 1.40* 1.87* 48
(0.18) 12.11 23.03 7,969 1.40* 0.77* 48
$(0.27) $11.27 15.50% $2,196 0.65%* 3.76%* 39%
(0.22) 11.25 14.83 3,653 1.40* 1.92* 39
(0.23) 11.24 14.82 9,826 1.40* 2.14* 39
$(0.36) $10.33 6.91% $ 407 0.65%* 7.54%* 37%
(0.31) 10.32 6.29 1,738 1.40* 4.09* 37
(0.32) 10.30 6.27 4,969 1.40* 3.39* 37
</TABLE>
Prospectus 40
<PAGE>
--------------------------------------------------------------------
PIMCO FundsINVESTMENT ADVISER AND ADMINISTRATOR
Asset PIMCO Advisors L.P., 800 Newport Center Drive, Newport Beach, CA
Allocation 92660
Series --------------------------------------------------------------------
DISTRIBUTOR
PIMCO Funds Distributors LLC, 2187 Atlantic Street, Stamford, CT
06902
--------------------------------------------------------------------
CUSTODIAN
State Street Bank & Trust Co., 801 Pennsylvania, Kansas City, MO
64105
--------------------------------------------------------------------
SHAREHOLDER SERVICING AGENT AND TRANSFER AGENT
PFPC, Inc., P.O. Box 9688, Providence, RI 02940
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INDEPENDENT ACCOUNTANTS
PricewaterhouseCoopers LLP, 1055 Broadway, Kansas City, MO 64105
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LEGAL COUNSEL
Ropes & Gray, One International Place, Boston, MA 02110
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For further information about the PIMCO Funds, call 1-800-426-0107
or visit our Web site at www.pimcofunds.com.
Not part of the Prospectus
<PAGE>
Investment Advisor and Administrator
PIMCO Advisors L.P.
800 Newport Center Drive Newport
Beach, CA 92660
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.
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
PIMCO Funds Asset Allocation Series, call
1-800-426-0107 or visit our Web site
at www.pimcofunds.com
[PIMCO FUNDS LOGO APPEARS HERE]
PIMCO Funds
2187 Atlantic Street
Stamford, CT 06877
