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Credit Strategies

Active credit solutions for active investors

Experience Matters: Lessons From 20 Years of
Investment Grade Credit

PIMCO’s forward-looking, 360-degree approach seeks to identify value across the credit spectrum before the market

silver

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Overall Morningstar Rating™

Corporate Bond ( funds)

Benchmark

Bloomberg Barclays U.S. Credit Index

Average Annual
Returns (%)
1 yr 3 yr 5 yr 10 yr S.I.*
Fund 9.51 5.49 5.27 5.59 7.23
Benchmark 7.88 5.95 4.67 4.83 5.90
Fund inception date
30-Day SEC Yield (as of 04/30/2021) 2.22%
Gross Expense Ratio
Adjusted Expense Ratio

()

Overall Morningstar Rating™

Preferred Stock ( funds)

Benchmark

70% ICE BofAML 8% Constrained Core West Preferred & Jr Subordinated Securities Index (P8JC) and 30% ICE BofAML Contingent Capital Index (COCO)

Average Annual
Returns (%)
1 yr 3 yr 5 yr 10 yr S.I.*
Fund 24.86 7.71 9.29 - 7.39
Benchmark 22.99 7.38 7.71 - 6.69
Fund inception date 04/13/2015
30-Day SEC Yield (as of 04/30/2021) 2.59%
Gross Expense Ratio
Net Expense Ratio1
Adjusted Expense Ratio
gold

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Overall Morningstar Rating™

Multisector Bond ( funds)

Benchmark

Bloomberg Barclays Global Credit Hedged USD Index

Average Annual
Returns (%)
1 yr 3 yr 5 yr 10 yr S.I.*
Fund 12.15 5.24 6.37 5.42 6.81
Benchmark 10.14 5.59 5.06 5.10 5.33
Fund inception date
30-Day SEC Yield (as of 04/30/2021) 2.20%
Gross Expense Ratio
Adjusted Expense Ratio

Morningstar ratings as of . Performance data as of 03/31/2021. Source: PIMCO, Bloomberg. Mutual Fund performance is for the Institutional Class Shares. Performance displayed is net of fees. 1 The Net Expense Ratio reflects a contractual fee waiver related to the Fund's subsidiary that will not terminate so long as PIMCO's advisory contract with the Fund's subsidiary is in place. The Adjusted Expense Ratio is the same as the Net Expense Ratio, but also excludes certain investment expenses such as interest expense from borrowings and repurchase agreements and dividend expense from investments on short sales, incurred directly by the Fund or indirectly through the Fund's investments in underlying PIMCO Funds (if applicable), none of which are paid to PIMCO.

Performance quoted represents past performance. Past performance is not a guarantee or a reliable indicator of future results. Investment return and the principal value of an investment will fluctuate. Shares may be worth more or less than original cost when redeemed. Current performance may be lower or higher than performance shown. For performance current to the most recent month-end, visit www.pimco.com or call (888) 87-PIMCO.

Explore our full credit solutions suite

PIMCO Flexible Credit Income Fund

With lower returns expected from traditional asset classes, PIMCO Flexible Credit Income Fund can opportunistically invest in global public and private credit markets, which may help enhance return potential.

Learn more

PIMCO’s Credit Capabilities

As one of the largest investors in global credit markets, we seek to identify value across the credit spectrum before the market.

$489 billion

Assets under management in the credit platform (as of 3/31/2021)

133

Portfolio managers dedicated to credit

76

Research analysts independently rate bonds

Need help finding credit solutions for the current market environment?

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Disclosures

Investors should consider the investment objectives, risks, charges and expenses of the funds carefully before investing. This and other information are contained in the fund’s prospectus and summary prospectus, if available, which may be obtained by contacting your investment professional or PIMCO representative. Click here for a complete list of the PIMCO Funds prospectuses and summary prospectuses. Please read them carefully before you invest or send money.

The performance figures presented reflect the total return performance for the Institutional Class shares (after fees) and reflect changes in share price and reinvestment of dividend and capital gain distributions. All periods longer than one year are annualized.

Investments made by a Fund and the results achieved by a Fund are not expected to be the same as those made by any other PIMCO-advised Fund, including those with a similar name, investment objective or policies. A new or smaller Fund’s performance may not represent how the Fund is expected to or may perform in the long-term. New Funds have limited operating histories for investors to evaluate and new and smaller Funds may not attract sufficient assets to achieve investment and trading efficiencies. A Fund may be forced to sell a comparatively large portion of its portfolio to meet significant shareholder redemptions for cash, or hold a comparatively large portion of its portfolio in cash due to significant share purchases for cash, in each case when the Fund otherwise would not seek to do so, which may adversely affect performance.

Differences in the Fund’s performance versus the index and related attribution information with respect to particular categories of securities or individual positions may be attributable, in part, to differences in the pricing methodologies used by the Fund and the index.

There is no assurance that any fund, including any fund that has experienced high or unusual performance for one or more periods, will experience similar levels of performance in the future. High performance is defined as a significant increase in either 1) a fund’s total return in excess of that of the fund’s benchmark between reporting periods or 2) a fund’s total return in excess of the fund’s historical returns between reporting periods. Unusual performance is defined as a significant change in a fund’s performance as compared to one or more previous reporting periods.

Exchange Traded Funds (“ETF”) are afforded certain exemptions from the Investment Company Act. The exemptions allow, among other things, for individual shares to trade on the secondary market. Individual shares cannot be directly purchased from or redeemed by the ETF. Purchases and redemptions directly with ETFs are only accomplished through creation unit aggregations or “baskets” of shares. Shares of an ETF are bought and sold at market price (not NAV). Brokerage commissions will reduce returns. Investment policies, management fees and other information can be found in the individual ETF’s prospectus. Buying or selling ETF shares on an exchange may require the payment of brokerage commissions. Due to the costs inherent in buying or selling Fund shares, frequent trading may detract significantly from investment returns. Investment in Fund shares may not be advisable for investors who expect to engage in frequent trading. Current holdings are subject to risk. Holdings are subject to change at any time. An investment in an ETF involves risk, including the loss of principal. Investment return, price, yield and Net Asset Value (NAV) will fluctuate with changes in market conditions. Investments may be worth more or less than the original cost when redeemed. Investing in the bond market is subject to certain risks including the risk that fixed income securities will decline in value because of changes in interest rates; the risk that fund shares could trade at prices other than the net asset value; and the risk that the manager’s investment decisions might not produce the desired results. ETF shares may be bought or sold throughout the day at their market price on the exchange on which they are listed. However, there can be no guarantee that an active trading market for PIMCO ETF shares will develop or be maintained, or that their listing will continue or remain unchanged. Premiums (when market price is above NAV) or discounts (when market price is below NAV) reflect the differences (expressed as a percentage) between the NAV and the Market Price of the Fund on a given day, generally at the time the NAV is calculated. A discount or premium could be significant. Data in chart format displaying the frequency distribution of discounts and premiums of the Market Price against the NAV can be found for each Fund at pimcoetfs.com.

Interval funds are an unlisted closed-end fund. Limited liquidity is provided to shareholders only through the fund’s quarterly offers to repurchase between 5% to 25% of its outstanding shares at net asset value (subject to applicable law and approval of the Board of Trustees, the Fund currently expects to offer to repurchase 10% of outstanding shares per quarter). There is no secondary market for the fund’s shares and none is expected to develop. Investors should consider shares of the fund to be an illiquid investment. It is important to note that differences exist between the fund’s daily internal accounting records, the fund’s financial statements prepared in accordance with U.S. GAAP, and recordkeeping practices under income tax regulations. It is possible that the fund may not issue a Section 19 Notice in situations where the fund’s financial statements prepared later and in accordance with U.S. GAAP or the final tax character of those distributions might later report that the sources of those distributions included capital gains and/or a return of capital. Please see the fund’s most recent shareholder report for more details. The fund’s distribution rate may be affected by numerous factors, including changes in realized and projected market returns, fund performance, and other factors. There can be no assurance that a change in market conditions or other factors will not result in a change in the fund distribution rate at a future time. An investment in an interval fund is not suitable for all investors. Unlike typical closed-end funds an interval fund’s shares are not typically listed on a stock exchange. Although interval funds provide limited liquidity to investors by offering to repurchase a limited amount of shares on a periodic basis, investors should consider shares of the Fund to be an illiquid investment. Investments in interval funds are therefore subject to liquidity risk as an investor may not be able to sell the shares at an advantageous time or price. The Fund anticipates that no secondary market will develop for its shares. There is no guarantee that an investor will be able to tender all of their requested Fund shares in a periodic repurchase offer.

Closed-end funds, unlike open-end funds, are not continuously offered. After the initial public offering, shares are sold on the open market through a stock exchange. Closed-end funds may be leveraged and carry various risks depending upon the underlying assets owned by a fund. Investment policies, management fees and other matters of interest to prospective investors may be found in each closed-end fund annual and semi-annual report. For additional information, please contact your investment professional.

A Word about risk: Investing in the bond market is subject to risks, including market, interest rate, issuer, credit, inflation risk, and liquidity risk. The value of most bonds and bond strategies are impacted by changes in interest rates. Bonds and bond strategies with longer durations tend to be more sensitive and volatile than those with shorter durations; bond prices generally fall as interest rates rise, and low interest rate environments increase this risk. Reductions in bond counterparty capacity may contribute to decreased market liquidity and increased price volatility. Bond investments may be worth more or less than the original cost when redeemed. Mortgage and asset-backed securities may be sensitive to changes in interest rates, subject to early repayment risk, and their value may fluctuate in response to the market's perception of issuer creditworthiness; while generally supported by some form of government or private guarantee there is no assurance that private guarantors will meet their obligations. Inflation-linked bonds (ILBs) issued by a government are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation; ILBs decline in value when real interest rates rise. Certain U.S. Government securities are backed by the full faith of the government, obligations of U.S. Government agencies and authorities are supported by varying degrees but are generally not backed by the full faith of the U.S. Government; portfolios that invest in such securities are not guaranteed and will fluctuate in value. Investing in foreign denominated and/or domiciled securities may involve heightened risk due to currency fluctuations, and economic and political risks, which may be enhanced in emerging markets. High-yield, lower-rated, securities involve greater risk than higher-rated securities; portfolios that invest in them may be subject to greater levels of credit and liquidity risk than portfolios that do not. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Derivatives and commodity-linked derivatives may involve certain costs and risks such as liquidity, interest rate, market, credit, management and the risk that a position could not be closed when most advantageous. Commodity-linked derivative instruments may involve additional costs and risks such as changes in commodity index volatility or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Investing in derivatives could lose more than the amount invested. Diversification does not ensure against loss.

There is no guarantee that these investment strategies will work under all market conditions or are suitable for all investors and each investor should evaluate their ability to invest long-term, especially during periods of downturn in the market. Investors should consult their investment professional prior to making an investment decision.

Morningstar Rating™ as of 30 April 2021 for the institutional share class; other classes may have different performance characteristics. A rating is not a recommendation to buy, sell or hold a fund. The Credit Opportunities Bond Fund was rated against the following numbers of Nontraditional Bond funds over the following time periods: Overall 4 Stars (314 funds rated); 3 Yrs. 3 Stars (314 funds rated); 5 Yrs. 4 Stars (284 funds rated). The Diversified Income Fund was rated against the following numbers of Multisector Bond funds over the following time periods: Overall 4 Stars (295 funds rated); 3 Yrs. 4 Stars (295 funds rated); 5 Yrs. 5 Stars (260 funds rated); 10 Yrs. 4 Stars (140 funds rated). The High Yield Fund was rated against the following numbers of High Yield Bond funds over the following time periods: Overall 4 Stars (631 funds rated); 3 Yrs. 4 Stars (631 funds rated); 5 Yrs. 3 Stars (557 funds rated); 10 Yrs. 4 Stars (356 funds rated). The High Yield Spectrum Fund was rated against the following numbers of High Yield Bond funds over the following time periods: Overall 5 Stars (631 funds rated); 3 Yrs. 4 Stars (631 funds rated); 5 Yrs. 4 Stars (557 funds rated); 10 Yrs. 5 Stars (356 funds rated). The Investment Grade Credit Bond Fund was rated against the following numbers of Corporate Bond funds over the following time periods: Overall 4 Stars (190 funds rated); 3 Yrs. 2 Stars (190 funds rated); 5 Yrs. 4 Stars (136 funds rated); 10 Yrs. 4 Stars (89 funds rated). The Long-Term Credit Bond Fund was rated against the following numbers of Long-Term Bond funds over the following time periods: Overall 5 Stars (34 funds rated); 3 Yrs. 4 Stars (34 funds rated); 5 Yrs. 5 Stars (31 funds rated); 10 Yrs. 5 Stars (23 funds rated). The Preferred and Capital Securities Fund was rated against the following numbers of Preferred Stock funds over the following time periods: Overall 5 Stars (54 funds rated); 3 Yrs. 5 Stars (54 funds rated); 5 Yrs. 5 Stars (45 funds rated). The Low Duration Credit Fund was rated against the following numbers of Bank Loan funds over the following time periods: Overall 3 Stars (229 funds rated); 3 Yrs. 2 Stars (229 funds rated); 5 Yrs. 2 Stars (208 funds rated); 10 Yrs. 3 Stars (113 funds rated). The 0-5 Year High Yield Corporate Bond Index Exchange-Traded Fund was rated against the following numbers of High Yield Bond funds over the following time periods: Overall 3 Stars (631 funds rated); 3 Yrs. 2 Stars (631 funds rated); 5 Yrs. 3 Stars (557 funds rated). The Investment Grade Corporate Bond Index Exchange-Traded Fund was rated against the following numbers of Corporate Bond funds over the following time periods: Overall 3 Stars (190 funds rated); 3 Yrs. 3 Stars (190 funds rated); 5 Yrs. 3 Stars (136 funds rated); 10 Yrs. 3 Stars (89 funds rated). The Corporate & Income Opportunity Fund was rated against the following numbers of Multisector Bond funds over the following time periods: Overall 5 Stars (24 funds rated); 3 Yrs. 5 Stars (24 funds rated); 5 Yrs. 5 Stars (24 funds rated); 10 Yrs. 5 Stars (19 funds rated). The Corporate & Income Strategy Fund was rated against the following numbers of Multisector Bond funds over the following time periods: Overall 4 Stars (24 funds rated); 3 Yrs. 4 Stars (24 funds rated); 5 Yrs. 4 Stars (24 funds rated); 10 Yrs. 4 Stars (19 funds rated). The High Income Fund was rated against the following numbers of Multisector Bond funds over the following time periods: Overall 5 Stars (24 funds rated); 3 Yrs. 4 Stars (24 funds rated); 5 Yrs. 5 Stars (24 funds rated); 10 Yrs. 5 Stars (19 funds rated). The Income Strategy Fund was rated against the following numbers of Multisector Bond funds over the following time periods: Overall 4 Stars (24 funds rated); 3 Yrs. 4 Stars (24 funds rated); 5 Yrs. 4 Stars (24 funds rated); 10 Yrs. 3 Stars (19 funds rated). The Income Strategy Fund II was rated against the following numbers of Multisector Bond funds over the following time periods: Overall 3 Stars (24 funds rated); 3 Yrs. 3 Stars (24 funds rated); 5 Yrs. 4 Stars (24 funds rated); 10 Yrs. 3 Stars (19 funds rated).

The Morningstar Rating™ for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Morningstar, Inc.® 2020. All rights reserved. The information contained herein: (1) is proprietary to Morningstar (2) may not be copied or distributed and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

The Morningstar Analyst Rating™ is not a credit or risk rating. It is a subjective evaluation performed by Morningstar’s manager research group, which consists of various Morningstar, Inc. subsidiaries (“Manager Research Group”). In the United States, that subsidiary is Morningstar Research Services LLC, which is registered with and governed by the U.S. Securities and Exchange Commission. The Manager Research Group evaluates funds based on five key pillars, which are process, performance, people, parent, and price. The Manager Research Group uses this five-pillar evaluation to determine how they believe funds are likely to perform relative to a benchmark over the long term on a risk adjusted basis. They consider quantitative and qualitative factors in their research. For actively managed strategies, people and process each receive a 45% weighting in their analysis, while parent receives a 10% weighting. For passive strategies, process receives an 80% weighting, while people and parent each receive a 10% weighting. For both active and passive strategies, performance has no explicit weight as it is incorporated into the analysis of people and process; price at the share-class level (where applicable) is directly subtracted from an expected gross alpha estimate derived from the analysis of the other pillars. The impact of the weighted pillar scores for people, process and parent on the final Analyst Rating is further modified by a measure of the dispersion of historical alphas among relevant peers. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative investment strategies, the modification by alpha dispersion is not used.

The Analyst Rating scale is Gold, Silver, Bronze, Neutral, and Negative. For active funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that an active fund will be able to deliver positive alpha net of fees relative to the standard benchmark index assigned to the Morningstar category. The level of the rating relates to the level of expected positive net alpha relative to Morningstar category peers for active funds. For passive funds, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that a fund will be able to deliver a higher alpha net of fees than the lesser of the relevant Morningstar category median or 0. The level of the rating relates to the level of expected net alpha relative to Morningstar category peers for passive funds. For certain peer groups where standard benchmarking is not applicable, primarily peer groups of funds using alternative investment strategies, a Morningstar Analyst Rating of Gold, Silver, or Bronze reflects the Manager Research Group’s expectation that a fund will deliver a weighted pillar score above a predetermined threshold within its peer group. Analyst Ratings ultimately reflect the Manager Research Group’s overall assessment, are overseen by an Analyst Rating Committee, and are continuously monitored and reevaluated at least every 14 months

The Morningstar Analyst Rating (i) should not be used as the sole basis in evaluating a fund, (ii) involves unknown risks and uncertainties which may cause the Manager Research Group’s expectations not to occur or to differ significantly from what they expected, and (iii) should not be considered an offer or solicitation to buy or sell the fund.

For more detailed information about Morningstar’s Analyst Rating, including its methodology, please go to https://shareholders.morningstar.com/investor-relations/governance/Compliance--Disclosure/default.aspx.

© 2020 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. Past performance is no guarantee of future results.

This material contains the current opinions of the manager and such opinions are subject to change without notice. This material has been distributed for informational purposes only and should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. No part of this material may be reproduced in any form, or referred to in any other publication, without express written permission. PIMCO is a trademark of Allianz Asset Management of America L.P. in the United States and throughout the world. ©2020, PIMCO

PIMCO Investments LLC, distributor, 1633 Broadway, New York, NY 10019, is a company of PIMCO.

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