California Flexible Municipal Income Fund

CAFLX

Updated November 28, 2022

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

Fund Overview

PIMCO California Flexible Municipal Income Fund seeks to provide high current income exempt from federal income tax and California state personal income taxes, with capital appreciation as a secondary objective. The fund utilizes a flexible, multi-sector tax-efficient approach across the municipal credit spectrum. Its interval fund structure, which offers periodic repurchases rather than providing daily liquidity, gives the fund the flexibility to play offense to try to capitalize on dislocations in periods of municipal market stress by executing investment strategies that may be less liquid and more suited to longer holding periods.

The fund will invest, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of municipal bonds and other municipal securities, the interest from which is exempt from federal income tax and California income tax, in the opinion of bond counsel for the issuer at the time of issuance (or on the basis of other authority believed by PIMCO to be reliable). Both within and outside the 80% policy, the fund may invest in debt securities of an issuer located outside of California.

It also has the flexibility to invest the balance of its assets (i.e., not towards the 80% policy noted above) in federally tax exempt municipal bonds that are not exempt from California state tax as well as securities and assets that produce taxable income, such as preferred securities that, at the time of issuance, are eligible to pay dividends that qualify for certain favorable federal income tax treatment. The fund may also invest up to 5% of its total assets in securities of other investment companies (including those advised by PIMCO), including closed-end funds, exchange-traded funds and other open-end funds, that invest primarily in municipal bonds and other municipal securities of the types in which it may invest directly. 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. (See the fund’s prospectus for more detailed portfolio information.)

The fund is an interval fund and as such offers limited expected share repurchases. The fund has adopted a fundamental investment policy to make quarterly offers to repurchase between 5% and 25% of its outstanding common shares at net asset value, reduced by any applicable repurchase fee. Subject to applicable law and approval of the Board of Trustees, for each quarterly repurchase offer, the fund currently expects to offer to repurchase 10% of the fund’s outstanding common shares at net asset value. Even though the fund will make periodic repurchase offers for its outstanding common shares, as more fully described in the funds’ prospectus, investors should consider common shares of the fund to be an illiquid investment.

DIVIDEND FREQUENCY

Monthly with Daily Accrual

SHARE CLASS INCEPTION

06/27/2022

CUSIP

72202W104

RELATED

Managers

David Hammer

Head of Municipal Bond Portfolio Management

View Profile for David Hammer

Amit Arora

View Profile for Amit Arora

Rachel Betton

Portfolio Manager, Municipal Bonds

View Profile for Rachel Betton

Kyle Christine

Portfolio Manager, Municipal Bonds

View Profile for Kyle Christine

Yields & Distributions

Historical Prices & Distributions

1 - Day Distribution Yield as of 11/28/2022 -
NAV Distribution Rate as of 10/31/2022 3.58%
Latest Distribution ($ Share)1 as of 10/31/2022 $0.028218130
Distribution (YTD) 2 as of 10/31/2022 $0.101176600

disclosures

1Data does not include special cash dividends.
2Data 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 and dividing 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 income. 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.


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 06/15/2022
Gross Expense Ratio 3.54%
Net Expense Ratio 1.39%
The Net Expense Ratio reflects a contractual fee waiver and/or expense reduction, which is in place through 06/14/2023 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 0.81%
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) 1.00%
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 1.00% 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 11/28/2022

NAV $9.83 One Day Return 0.11%
Daily Change $0.01 Daily Since Inception Return -0.41%

All data as of

All data as of

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.

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 19.96
1-3 yrs 5.57
3-5 yrs 3.27
5-10 yrs 28.39
10-20 yrs 15.33
20+ yrs 27.49
Effective Maturity (yrs) 12.24

Top States Market Value %

California 73.73
Other3 17.88
Colorado 1.76
Georgia 1.71
Indiana 0.77

Sector Allocation
Market Value %

State/Local GO 8.44
Pre-Refunded 1.48
Education Rev. 4.35
Hospital Rev. 10.42
Housing Rev. 6.17
Ind Dev/Pollution Ctrl 13.62
Lease Rev. 0.83
Power Rev. 6.18
Resource Recovery 0.00
Special Tax 11.83
Transportation 11.22
Water & Sewer 9.28
Tobacco 1.08
Net Other Short Duration Instruments Muni4 2.65
Other Muni 3.03
US Government Related5 0.00
Mortgage 0.00
Invest. Grade Credit 0.00
High Yield Credit 0.84
Non-USD Developed 0.00
Emerging Markets6 0.00
Other3 2.08
Net Other Short Duration Instruments ex-Muni4 6.50

disclosures

3May include municipals, convertibles, preferreds, and yankee bonds.
4Net 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.
5May include nominal and inflation-protected Treasuries, Treasury futures and options, agencies, FDIC-guaranteed and government-guaranteed corporate securities, and interest rate swaps.
6Emerging 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.

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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 L.P. in the United States and throughout the world. ©2022, PIMCO
PIMCO Investments LLC, distributor, 1633 Broadway, New York, NY 10019, is a company of PIMCO.