Flexible Emerging Markets Income Fund

EMFLX

Updated September 23, 2022

Objective

The Fund seeks to provide attractive risk-adjusted returns and current income.

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Overview

Fund Overview

PIMCO Flexible Emerging Markets Income Fund seeks to achieve its investment objectives by investing, under normal circumstances, across a wide array of instruments, including from sovereign, quasi-sovereign and corporate borrowers, that are economically tied to “emerging market” countries. The Fund utilizes a flexible asset allocation strategy among multiple public and private credit sectors in the emerging market credit markets, including corporate debt (including, among other things, fixed-, variable- and floating-rate bonds, loans, convertible and contingent convertible securities and stressed, distressed and defaulted debt securities issued by corporations or other business entities), mortgage-related and other consumer-related instruments, collateralized debt obligations, including, without limitation, collateralized loan obligations, government, sovereign and quasi-sovereign debt and other fixed-, variable- and floating-rate income-producing securities.

The fund may invest without limit in illiquid assets and therefore access a greater degree of investments than a mutual fund. The fund will invest, under normal circumstances, at least 80% of its net assets (plus any borrowings for investment purposes) in a portfolio of instruments tied economically to emerging market countries. The Fund has no targeted average portfolio duration, but it is expected that the Fund normally will have a short to longer average portfolio duration (0-12 years). (See the fund prospectus for more detailed portfolio information.) The fund may predominantly hold U.S. dollar-denominated instruments. The primary investment focus is on borrowers viewed to be creditworthy by PIMCO. When opportunities do arise in more fragile countries, the interval fund structure allows the flexibility to structure lending in a way that can insulate against some of the historic risks observed in emerging market countries, including default, capital controls, or currency depreciation.

The fund is an interval fund and as such 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. Subject to applicable law and approval of the Board of Trustees, for each quarterly repurchase offer, the fund currently expects to offer to repurchase 5% of the fund’s outstanding common shares at net asset value.

DIVIDEND FREQUENCY

Quarterly with Daily Accrual

SHARE CLASS INCEPTION

03/15/2022

CUSIP

722040102

Managers

Pramol Dhawan

Head of Emerging Markets Portfolio Management

View Profile for Pramol Dhawan

Distributions

Historical Prices & Distributions

1 - Day Distribution Yield as of 09/23/2022 -
NAV Distribution Rate as of 06/30/2022 9.12%
Latest Distribution ($ Share)1 as of 06/30/2022 $0.191249440
Distribution (YTD) 2 as of 06/30/2022 $0.207568220

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 10/29/2021
Gross Expense Ratio 2.92%
Net Expense Ratio 0.88%
The Net Expense Ratio reflects a contractual fee waiver and/or expense reduction, which is in place through 07/29/2023 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 0.65%
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) 1.95%
Management Fee (on Total Managed Assets) 1.30%

Prices & Performance

Daily Statistics

All data as of 09/23/2022

NAV $8.11 One Day Return -0.67%
Daily Change $-0.06 Daily Since Inception Return -15.36%

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)

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.

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.
Total return performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
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.

Assets & Leverage

All data as of 08/31/2022 unless otherwise stated

Assets (in millions)

Common Net Assets $23
Outstanding Preferred Shares $0
Total Managed Assets3 $32

Leverage

% of Total Managed Assets % of Common Net Assets
Total Effective Leverage 28.30 39.47
Preferred Shares4 0.00 0.00
Reverse Repurchase Agreements5 9.29 12.96
Floating Rate Notes Issued6 0.00 0.00
Credit Default Swaps7 19.01 26.52

disclosures

3Total 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.
4Preferred Shares (%) consists of Preferred Shares divided by Total Managed Assets.
5Reverse Repurchase Agreements (%) consists of Reverse Repurchase Agreements divided by Total Managed Assets.
6Floating 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.
7Credit 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.
PIMCO does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax or legal questions and concerns.

The fund is a newly organized, 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 5% 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 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. 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. Corporate debt securities are subject to the risk of the issuer’s inability to meet principal and interest payments on the obligation and may also be subject to price volatility due to factors such as interest rate sensitivity, market perception of the creditworthiness of the issuer and general market liquidity. 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. 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. Sovereign securities are generally backed by the issuing government. Portfolios that invest in such securities are not guaranteed and will fluctuate in value.


Investments in distressed loans and bankrupt companies are speculative and the repayment of default obligations contains significant uncertainties. Floating rate loans are not traded on an exchange and are subject to significant credit, valuation and liquidity risk. The value of real estate and portfolios that invest in real estate may fluctuate due to: losses from casualty or condemnation, changes in local and general economic conditions, supply and demand, interest rates, property tax rates, regulatory limitations on rents, zoning laws, and operating expenses. Structured products such as collateralized loan obligations (CLOs) and collateralized debt obligations (CDOs) are also highly complex instruments, typically involving a high degree of risk; use of these instruments may involve derivative instruments that could lose more than the principal amount invested. 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. The Fund may invest without limit in investment grade debt securities and in below investment grade debt securities (commonly referred to as “high yield” securities or “junk bonds”), including securities of defaulted, stressed and distressed issuers. The Fund is non-diversified, which means that it may invest its assets in a smaller number of issuers than a diversified fund.


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. There is also no secondary market for the Fund’s shares and none is expected to develop. There is no guarantee that an investor will be able to tender all or any of their requested Fund shares in a periodic repurchase offer. An investment in the Fund is speculative involving a high degree of risk, including the risk of a substantial loss of investment.


Investors should carefully consider the Fund’s risks and investment objectives, as an investment in the Fund may not be appropriate for all investors and is not designed to be a complete investment program.


Because of the risks associated with (i) the Fund’s intention to focus its investments in emerging market securities (and related currency exposures), (ii) the Fund’s ability to invest in mortgage-related and other asset-backed instruments and high yield securities, (iii) the Fund’s ability to purchase or originate loans (including subprime loans) and related instruments, including loans and other instruments purchased on alternative lending platforms, and (iv) the Fund’s ability to use leverage, an investment in the Fund should be considered speculative and involves a high degree of risk, including the risk of a substantial loss of investment.


Before making an investment/allocation decision, investors should (i) consider the suitability of this investment with respect to an investor’s or a client’s investment objective and individual situation and (ii) consider factors such as an investor’s or a client’s net worth, income, age and risk tolerance.


Investment should be avoided where an investor/client has a short-term investing horizon and/or cannot bear the loss of some or all of their investment. It is possible that investing in the Fund may result in a loss of some or all of the amount invested.

PIMCO does not provide legal or tax advice. Please consult your tax and/or legal counsel for specific tax or legal questions and concerns. The discussion herein is general in nature and is provided for informational purposes only. There is no guarantee as to its accuracy or completeness. Any tax statements contained herein are not intended or written to be used, and cannot be relied upon or used for the purpose of avoiding penalties imposed by the Internal Revenue Service or state and local tax authorities. Individuals should consult their own legal and tax counsel as to matters discussed herein and before entering into any estate planning, trust, investment, retirement, or insurance arrangement.
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.