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Commodities Investing at PIMCO

Work with one of the world’s largest and longest-tenured commodity managers

PIMCO’s Commodities Capabilities

Our commodities team consists of deeply experienced specialists, backed by the full breadth of PIMCO’s resources and investment process.

20+ years

Experience in commodity investing

$17 billion

Commodities assets under management including fund of funds allocation (as of 6/30/2021)

5

Specialist portfolio managers with an average of 16+ years of experience

Why Invest in Commodities?

Commodities may provide a combination of diversification plus inflation hedging benefits and have historically improved the risk/return performance of a portfolio.

Inflation Hedge

Returns have historically been positively correlated with the U.S. Consumer Price Index.

Diversification

Annual returns have historically had a very low correlation with both U.S. equities and U.S. bonds.

Return Potential

Commodities have historically improved the risk/return performance of a portfolio.

Correlation of annual returns (12/31/1976 to 12/31/2020) Bloomberg Commodity Index U.S. equities U.S. bonds U.S. inflation
Bloomberg Commodity Index 1.00 0.21 -0.09 0.62
U.S. equities 0.21 1.00 0.22 0.02
U.S. bonds -0.09 0.22 1.00 -0.45

All data as of 31 December 2020. Source: PIMCO, Bloomberg. Between 1976 and 2020, annual returns on the Bloomberg Commodity Index had a very low correlation with U.S. equities, as represented by the S&P 500 Index, and a correlation close to zero with U.S. bonds, as represented by the Bloomberg Barclays U.S. Aggregate Index. However, they were positively correlated with the U.S. Consumer Price Index.


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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.

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.

A Word about risk: Commodities contain heightened risk including market, political, regulatory, and natural conditions, and may not be suitable for all investors. The fund will seek exposure to commodities through commodity-linked derivatives and through the PIMCO Cayman Commodity Fund I Ltd., a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands (the “Subsidiary”). The Subsidiary is advised by PIMCO, and has the same investment objective as the Fund. The Subsidiary (unlike the Fund) may invest without limitation in commodity-linked swap agreements and other commodity-linked derivative instruments. 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 suitably appropriate 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.

Bloomberg Commodity Index Total Return is an unmanaged index composed of futures contracts on a number of physical commodities. The index is designed to be a highly liquid and diversified benchmark for commodities as an asset class. The futures exposures of the benchmark are collateralized by US T-bills.

S&P 500 Index is an unmanaged market index generally considered representative of the stock market as a whole. The Index focuses on the large-cap segment of the U.S. equities market.

Bloomberg Barclays U.S. Aggregate Index represents securities that are SEC-registered, taxable, and dollar denominated. The index covers the U.S. investment grade fixed rate bond market, with index components for government and corporate securities, mortgage pass-through securities, and asset-backed securities. These major sectors are subdivided into more specific indices that are calculated and reported on a regular basis.

The Consumer Price Index is an unmanaged index representing the rate of inflation of the U.S. consumer prices as determined by the U.S. Bureau of Labor Statistics. There can be no guarantee that the CPI or other indexes will reflect the exact level of inflation at any given time.

It is not possible to invest in an unmanaged index.

Correlation is a statistical measure of how two securities move in relation to each other.

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Morningstar Rating™ is for the institutional share class only, as of 30 September 2021 monthly; other classes may have different performance characteristics. The CommodityRealReturn Strategy Fund® was rated against the following numbers of Commodities Broad Basket funds over the following time periods: 4 stars out of 100 funds overall; 4 stars out of 100 funds in the last three years, 4 stars out of 79 funds in the last five years, and 3 stars out of 47 funds in the last ten years. The CommoditiesPLUS® Strategy Fund was rated against the following numbers of Commodities Broad Basket funds over the following time periods: 3 stars out of 100 funds overall; 2 stars out of 100 funds in the last three years, 3 stars out of 79 funds in the last five years, and 3 stars out of 47 funds in the last ten years. Past performance is no guarantee of future results.

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