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Prospectus Monthly Commentaries

California Flexible Municipal Income Fund

CAFLX

Updated December 01, 2023

Prospectus Monthly Commentaries

Objective

The Fund seeks to provide high current income exempt from federal and California income tax. Capital appreciation is a secondary objective.

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Overview

Repurchase Information

Fund Overview

California focused opportunistic municipal credit strategy

The PIMCO California Flexible Municipal Income Fund (“Cal Flex”) aims to provide high current income exempt from both federal and California state personal income taxes, with capital appreciation as a secondary objective. The fund seeks to opportunistically exploit structural illiquidity in the municipal market and utilizes a flexible, tax-efficient approach across the municipal credit spectrum, with the ability to opportunistically allocate to related markets when they are deemed attractive on a relative, after-tax basis. Cal Flex’s interval fund structure provides flexibility to go on offense during periods of municipal outflows and broader market stress and aim to invest in bonds offering attractively high yields and total return potential.

Investment Guidelines

The fund will invest, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of federally and California tax-exempt municipal bonds. With the remaining 20%, the fund may invest in securities that produce taxable income, such as Qualified Dividend Income (“QDI”) preferred securities that are eligible for favorable taxation (provided certain requirements and holding periods are satisfied). The fund may also invest up to 5% of its total assets in municipal closed-end funds that invest primarily in municipal bonds. The fund does not target a specific duration or maturity for the municipal bonds and other securities in which it invests, and the fund’s average portfolio duration, as calculated by PIMCO, may vary significantly depending on market conditions and other factors. Please see the fund’s prospectus for more detailed portfolio information.

Interval fund structure

Because of its interval fund structure, the fund can offer investors access to less liquid, and potentially higher yielding opportunities. The fund can act as a liquidity provider during times of municipal markets outflows which have historically been large in magnitude, without having to meet daily redemptions like other open-end municipal funds. Even though the fund will make periodic repurchase offers for its outstanding common shares, as more fully described in the fund’s prospectus, investors should consider common shares of the fund to be an illiquid investment.

PIMCO’s deep municipal resources

PIMCO has been managing municipal bonds since 1997, and today we are among the largest investors in the market. A dedicated municipal bond team constantly analyzing macro-economic, technical, and fundamental trends within the market alongside PIMCO’s broader credit research capabilities creates a compelling platform for municipal investors.

DIVIDEND FREQUENCY

Monthly with Daily Accrual

SHARE CLASS INCEPTION

06/27/2022

CUSIP

72202W104

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Managers

David Hammer

Portfolio Manager

View Profile for David Hammer

Amit Arora

Portfolio Manager, Investment Grade

View Profile for Amit Arora

Kyle Christine

Portfolio Manager, Municipal Bonds

View Profile for Kyle Christine

Yields & Distributions

Historical Prices & Distributions

1 - Day Distribution Yield as of 12/01/2023 -
NAV Distribution Rate1 as of 11/30/2023 3.65%
Latest Distribution ($ Share)2 as of 11/30/2023 $0.029960460
Distribution (YTD) 3 as of 11/30/2023 $0.327491460

disclosures

1The Fund’s distribution rate may be affected by numerous factors, including, but not limited to, 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. Distribution rates are not performance.  The distribution rate is calculated by annualizing the most recent distribution per share (with such annualizing based on dividing the number of calendar days during the relevant year by the number of calendar days over which the most recent distribution accumulated) and dividing it by the NAV as of the reported date.  For example, if the most recent distribution accumulated over 28 days and there were 365 days in that year, the annualizing would occur by dividing 365 days by 28 days and then multiplying by the most recent distribution per share. Distributions may be comprised of ordinary income, net capital gains, and/or a return of capital (ROC) of your investment in the fund. Because a distribution may include a ROC, the distribution rate should not be confused with yield. Please refer to the most recent Section 19 Notice, if applicable, for additional information regarding the estimated composition of distributions. Final determination of a distribution’s tax character will be sent to shareholders when such information is available.
2Data does not include special cash dividends.
3Data is based on distributions since the most recent calendar year end and does not include special cash dividends.

Distribution rates are not performance and are calculated by annualizing the most recent distribution per share (with such annualizing based on dividing the number of calendar days during the year by the number of calendar days over which the most recent distribution accumulated) and dividing it by the NAV as of the reported date. Distributions may be comprised of ordinary income, net capital gains, and/or a return of capital (ROC) of your investment in the fund. Because the distribution rate may include a ROC, it should not be confused with yield or performance. Please refer to the most recent Section 19 Notice, if applicable, for additional information regarding the composition of distributions. Final determination of a distribution’s tax character will be made on Form 1099 DIV sent to shareholders each January.


A negative value for Undistributed Net Investment Income represents the potential for a ROC on an estimated tax basis. Please refer to the most recent Section 19 Notice, if applicable, for additional information regarding the composition of distributions. Final determination of a distribution’s tax character will be made on Form 1099 DIV sent to shareholders each January.


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.

Fees & Expenses

Effective as of 04/30/2023
Gross Expense Ratio 1.93%
Net Expense Ratio 1.86%
The Net Expense Ratio reflects a contractual fee waiver and/or expense reduction. The expense reduction is in place through 5/2/2024 and renews automatically for a full year unless terminated by PIMCO in accordance with the terms of the relevant agreement.
Adjusted Expense Ratio 0.99%
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.
Management Fee (on Net Assets) 0.89%
Management Fee (on Net Assets) is comprised of an advisory fee of 0.89% and a supervisory and administrative fee of 0.00% of the Fund’s average daily net assets.
Management Fee (on Total Managed Assets) 0.75%
PIMCO is paid a management fee of 0.75% on total managed assets for advisory, supervisory, administrative and other services, which is equivalent to 0.89% on the Fund's common share net assets. The Fund remains responsible for certain fees and expenses that are not covered by the management fee. Please see "Management of the Fund - Management Fee" in the prospectus for an explanation of the management fee and definition of "total managed assets."

Prices & Performance

Daily Statistics

All data as of 12/01/2023

NAV $10.03 One Day Return 0.33%
Daily Change $0.03 Daily YTD Return 5.49%

All data as of

All data as of

Click here to view the Price and Performance for all Interval Funds

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.

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.

Certain Funds may offer a share class with an inception date which is different than the inception date of the Fund. For the periods prior to the inception date of a share class, performance information is based on the performance of the Fund’s oldest class shares, adjusted to reflect the fees and expenses paid by that class of shares.

Calendar Year Returns %

All data as of

Growth of $10,000 (hypothetical)

Morningstar and Lipper

disclosures

Performance figures presented reflect the total return performance after fees, unless otherwise noted, and reflect changes in share price and reinvestment of dividend and capital gain distributions on the payable date. All periods longer than one year are annualized. Periods less than on year are cumulative.


Historical performance may have been positively impacted by fee waivers or expense limitations in place during some or all of the periods shown, if applicable. Future performance (including total return or yield) and distributions may be negatively impacted by the expiration or reduction of any such fee waivers or expense limitations.


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.
Daily YTD return is from the most recent calendar year end.
Growth of $10,000 is calculated at NAV and assumes that all dividend and capital gain distributions were reinvested. It does not take into account sales charges or the effect of taxes. Results are not indicative of future performance.

Portfolio Composition

All data as of unless otherwise stated

Maturity %

0-1 yrs 11.80
1-3 yrs 2.24
3-5 yrs 2.60
5-10 yrs 24.11
10-20 yrs 26.80
20+ yrs 32.46
Effective Maturity (yrs) 14.24

Top States Market Value %

California 74.48
Other4 13.33
Texas 2.22
Alabama 1.08
Nevada 0.98

Sector Allocation
Market Value %

State/Local GO 11.08
Pre-Refunded 0.69
Education Rev. 3.72
Hospital Rev. 10.02
Housing Rev. 6.41
Ind Dev/Pollution Ctrl 10.00
Lease Rev. 5.11
Power Rev. 3.61
Resource Recovery 0.46
Special Tax 14.87
Transportation 14.39
Water & Sewer 11.58
Tobacco 1.07
Net Other Short Duration Instruments Muni5 0.00
Other Muni 3.27
US Government Related6 0.00
Mortgage 0.00
Invest. Grade Credit 0.00
High Yield Credit 0.74
Non-USD Developed 0.00
Emerging Markets7 0.00
Other4 1.43
Net Other Short Duration Instruments ex-Muni5 1.54

disclosures

4May include municipals, convertibles, preferreds, and yankee bonds.
5Net Other Short Duration Instruments includes securities and other instruments (except those instruments tied to emerging markets by country of risk) with an effective duration less than one year and rated investment grade or higher or, if unrated, determined by PIMCO to be of comparable quality, commingled liquidity funds, uninvested cash, interest receivables, net unsettled trades, broker money, short duration derivatives and derivatives offsets. With respect to certain categories of short duration securities, the Adviser reserves the discretion to require a minimum credit rating higher than investment grade or take into account other pertinent factors for inclusion in this category. Derivatives Offsets includes offsets associated with investments in futures, swaps and other derivatives. Such offsets may be taken at the notional value of the derivative position.
6May include nominal and inflation-protected Treasuries, Treasury futures and options, agencies, FDIC-guaranteed and government-guaranteed corporate securities, and interest rate swaps.
7Emerging markets instruments includes an emerging market security or other instrument economically tied to an emerging market country by country of risk with an effective duration less than one year and rated investment grade or higher or if unrated, determined to be similar quality by PIMCO. Emerging Markets includes the value of short duration emerging markets instruments previously reported in another category.
Portfolio information in the charts is based on the fund's net assets. These percentages may differ from those used for the fund's compliance calculations, including the fund's prospectus, regulatory, and other investment limitations and policies, which may be based on total assets of the fund or other measurements, may include or exclude various categories of investments from those covered in the portfolio allocation categories shown in this report, and may be based on different classifications and measurements of the fund’s investments and other criteria.
References to specific sectors, securities or issuers are for illustrative purposes only. All holdings are subject to change daily. All share classes have the same portfolio but different expenses.

Assets & Leverage

All data as of 10/31/2023 unless otherwise stated

Assets (in millions)

Common Net Assets $61
Outstanding Preferred Shares $0
Total Managed Assets8 $61

Leverage

% of Total Managed Assets % of Common Net Assets
Total Effective Leverage 0.00 0.00
Preferred Shares9 0.00 0.00
Reverse Repurchase Agreements10 0.00 0.00
Floating Rate Notes Issued11 0.00 0.00
Credit Default Swaps12 0.00 0.00

disclosures

8Total Managed Assets include Net Assets Applicable to Common Shareholders ("Common Net Assets") + Preferred Shares + Reverse Repurchase Agreements + Credit Default Swaps + Floating Rate Notes Issued in Tender Option Bond ("TOB") transactions, as applicable. In TOB transactions, a fund sells a fixed rate municipal bond to a broker who places that bond in a Special Purpose Trust from which Floating Rate Notes and Inverse Floaters are issued.
9Preferred Shares (%) consists of Preferred Shares divided by Total Managed Assets.
10Reverse Repurchase Agreements (%) consists of Reverse Repurchase Agreements divided by Total Managed Assets.
11Floating Rate Notes Issued (%) consists of Floating Rate Notes Issued in transactions divided by Total Managed Assets. In TOB transactions, a fund sells a fixed rate municipal bond to a broker who places that bond in a Special Purpose Trust from which Floating Rate Notes and Inverse Floaters are issued.
12Credit Default Swaps (“CDS”) (%) consists of the aggregate notional amount of sell protection CDS plus the net market value of buy protection CDS, as applicable, divided by Total Managed Assets.
Past performance is no guarantee of future results. Investing in securities entails risk, including possible loss of principal. The use of leverage may cause a Fund to liquidate portfolio positions when it may not be advantageous to do so to satisfy its obligations or to meet segregation requirements. The use of leverage may cause a Fund to be more volatile, which may increase the risk of investment loss.

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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.  Please read them 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.


Investments made by the Fund and the results achieved by the 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. The 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: 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 is exempt from federal income tax and may be subject to state and local taxes and at times the alternative minimum tax; a strategy concentrating in a single or limited number of states is subject to greater risk of adverse economic conditions and regulatory changes. . 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. 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. Private placements involve an investment in non-publically traded securities which may be subject to illiquidity risk. Portfolios that invest in private placements may engage in speculative investment practices that increase the risk of investment loss. 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 appropriate 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.


There can be no assurance that the Fund will achieve its investment objectives or structure its investment portfolio as anticipated. PIMCO does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax or legal questions and concerns.
PIMCO as a general matter provides services to qualified institutions, financial intermediaries and institutional investors. Individual investors should contact their own financial professional to determine the most appropriate investment options for their financial situation. This material contains the current opinions of the manager and such opinions are subject to change without notice. For Informational Purposes Only. 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 LLC in the United States and throughout the world. ©2023, PIMCO
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