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PIMCO Flexible Municipal Income Fund

Innovating in pursuit of higher after‑tax yield

Liquidity profile that mirrors the market

Quarterly liquidity designed to capitalize on structural opportunities in the muni market

High income potential

Seeks to deliver higher after-tax yield than traditional municipal bond strategies

Flexible mandate

Potential to allocate away from munis when more attractive tax-efficient alternatives are available

One of the first municipal interval funds in the industry

For longer-term muni investors, the PIMCO Flexible Municipal Income Fund (“MuniFlex”) aims to exploit inherent illiquidity in the municipal market for enhanced tax-efficient income

Be on offense during periods of muni market stress

While many muni funds may face significant selling pressure during periods of market stress, which have seen large outflows along with rising yields and falling prices (most recently in early 2020), MuniFlex’s interval fund structure allows it to stay invested and make opportunistic purchases.

As of 30 September 2020. Source: PIMCO, Bloomberg, Morningstar, Lipper. This chart is presented for illustrative purposes only and is not intended to represent any fund’s performance or how any fund’s portfolio will be invested or allocated at any particular time. Investment Grade (IG) Municipal Bond is represented by the Bloomberg Barclays Municipal Bond Index; HY Muni Bond is represented by the Bloomberg Barclays Muni High Yield Bond Index. The Covid-19 Crisis is ongoing and is used for illustration purposes only, and may not be reflective of the current environment. Past performance is not a guarantee or reliable indicator of future results.

We expect muni market stress to persist and continue to create opportunities

We believe muni market outflow cycles could grow in frequency and severity. One reason is that muni market liquidity has declined, as broker-dealers are holding smaller inventories, while assets held in daily-liquid vehicles have nearly doubled over the past decade. We think now is a good time for investors to consider MuniFlex and potentially take advantage of these market disruptions.

As of 30 June 2020. Source: The Federal Reserve.

For investors seeking tax-efficient high income and capital appreciation, MuniFlex offers a compelling new option

Learn more in our Q&A with portfolio managers David Hammer and Rachel Betton on how investors may benefit from a flexible, tax-efficient approach that targets opportunities across the municipal credit spectrum – and beyond.

Download Q&AWatch video

Potential benefits of the interval fund structure

  • Liquidity profile that better matches that of the asset class
  • Additional yield potential through longer-term leverage
  • Less “cash drag” due to freedom from daily redemptions
  • Share repurchases at NAV, avoiding the issue of shares trading at a premium or discount
  • Offered at lower investment minimums than traditional limited partnerships
  • Simpler tax treatment relative to private funds

What is an interval fund?

An interval fund is an investment vehicle that does not allow investors to withdraw funds on a daily basis but periodically offers to repurchase a limited percentage of outstanding shares, as defined in its prospectus, from its shareholders. This gives portfolio managers more freedom to invest in less liquid and more complex assets that may have higher return potential.

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Why PIMCO for munis?

$50B

In firm-wide dedicated municipal bond holdings

30+

Dedicated municipal bond team members

21 years

Experience managing municipal bond assets

65+

Firm-wide credit analysts supporting dedicated muni teams

Fund summary and key terms

Management fee

1.02% on net assets1

PIMCO has contractually agreed, through May 2, 2021, to waive 50% of itsManagement Fee for the Fund (the “Management Fee Waiver Agreement”). The Management Fee Waiver Agreement will continue through May 2, 2021, at which time it will terminate unless otherwise agreed to in writing by the parties.

Gross expense ratio

1.99%

Net expense ratio

1.48%.

The Net Expense Ratio reflects a contractual fee waiver and/or expense reduction, which is in place through 05/02/2021 and renews automatically for a full year unless terminated by PIMCO in accordance with the terms of the agreement. See the Fund's prospectus for more information.

Adjusted Expense Ratio

0.66%.

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.

Ticker

PMFLX

Subscriptions/NAV

Daily

Tax treatment

1099

Income distribution

Monthly

Repurchase frequency

Quarterly share repurchases expected to equal 10% of outstanding shares

Repurchase fee

The Fund does not currently expect to charge a repurchase fee. However, the Fund may charge a repurchase fee of up to 2.00%

Expected repurchase dates

February, May, August, November

Learn more about PIMCO Flexible Municipal Income Fund

Talk with our team today.

Disclosures

All data as of 30 September 2020 unless specified otherwise. Includes assets and employee data from Gurtin acquisition in January 2019

1 Management fees include fees payable to the Investment Manager for advisory services and for supervisory, administrative and other services. Pursuant to an investment management agreement, PIMCO is paid a Management Fee of 0.75% of the Fund's total managed assets. The Fund pays for the advisory, supervisory and administrative services it requires under what is essentially an all-in fee structure (the "unified management fee"). The Fund (and not PIMCO) will be responsible for certain fees and expenses that are not covered by the unified management fee under the investment management agreement. Other fund operating expenses include, but are not limited to, Interest payments on borrowed funds expense of 0.28%; Dividend and other costs on preferred shares of 0.52%; Other expenses of 1.11%. Please see "Management of the Fund - Management Fee" in the prospectus for an explanation of the unified management fee and definition of "total managed assets."

Investors should consider the investment objectives, risks, charges and expenses of the fund carefully before investing. This and other information are contained in the fund’s prospectus, which may be obtained by contacting your investment professional or PIMCO representative or by visiting www.pimco.com. Please read the prospectus carefully before you invest or send money.

The fund is an unlisted closed-end “interval 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.

A word about risk: Investing in municipal bonds involves the risks of investing in debt securities generally and certain other risks. Investors will, at times, incur a tax liability. Income from municipal bonds may be subject to state and local taxes and at times the alternative minimum tax. 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 the current low interest rate environment increases this risk. Current 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. An investment in municipal closed-end funds will be subject to market risk, leverage risk, and various other risks depending upon the underlying assets owned by a fund. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. 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. 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. Investing in derivatives could lose more than the amount invested. The use of leverage may cause a portfolio to liquidate positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. Leverage, including borrowing, may cause a portfolio to be more volatile than if the portfolio had not been leveraged.

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.

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.

Statements concerning financial market trends are based on current market conditions, which will fluctuate. 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 for a long-term especially during periods of downturn in the market. An investment in the Fund is speculative and may involve a high degree of risk, including the risk of a substantial loss of investment. Investors should consult their investment professional prior to making an investment decision.

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. Information contained herein has been obtained from sources believed to be reliable, but not guaranteed. 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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