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Prospectus

RAE PLUS Small Fund

PCFEX

Updated December 06, 2023

Prospectus

Objective

Seeks total return which exceeds that of its benchmark

Primary Portfolio

Equity exposure of RAE US Small portfolio is obtained using equity-linked instruments, allowing the fund to generate additional returns from a flexible bond alpha strategy.

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Overview

Fund Overview

Time-tested systematic approach to U.S. value investing

The fund invests in a diversified portfolio of U.S. stocks using the Research Affiliates Equity (RAETM) strategy, an innovative value approach designed to outperform the Russell 2000® Value Index.

Why Invest In This Fund

Aim to capture robust sources of return potential

RAETM is a systematic strategy that selects undervalued stocks using valuation metrics designed by Research Affiliates, while also incorporating quality and momentum signals to improve performance. The RAETM strategy combines several well-researched measures of each signal to achieve higher returns over time.

On market inefficiencies

Selected stocks are weighted based on fundamental measures of company size such as sales, cash flows, dividends and book value. This weighting methodology helps the fund to capitalize on market inefficiencies by systematically buying low and selling high and benefit from long-term mean reversion in stock prices.

Offers the benefits of investing systematic equity strategy

The fund’s unique rules-based approach seeks a consistent investment process and a contrarian portfolio designed, which aims to deliver market outperformance.

Our Expertise

PIMCO introduced the groundbreaking StocksPLUS strategy in 1986 - the same approach used across our “PLUS” portfolios - which capitalizes on the depth and breadth of PIMCO’s global resources. PIMCO has partnered with Research Affiliates to deliver systematic equity strategies since 2005. Today, we manage RAETM “PLUS” portfolios across a range of objectives and market exposures.

PRIMARY BENCHMARK

Russell 2000® Value Index

PRIMARY BENCHMARK DESCRIPTION

The Russell 2000® Value Index measures the performance of the small-capitalization value sector of the U.S. equity market, as defined by FTSE Russell. The Russell 2000® Value Index is a subset of the Russell 2000® Index. It is not possible to invest directly in an unmanaged index.

SECONDARY BENCHMARK

Russell 2000® Index

SECONDARY BENCHMARK DESCRIPTION

Russell 2000® Index is composed of 2,000 of the smallest companies in the Russell 3000 Index and is considered to be representative of the small cap market in general. It is not possible to invest directly in an unmanaged index.

DIVIDEND FREQUENCY

Quarterly

SHARE CLASS INCEPTION

02/28/2014

CUSIP

72201U257

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Managers

Robert Arnott

Founder and Chairman, Research Affiliates

View Profile for Robert Arnott

Chris Brightman

Chief Executive Officer and Chief Investment Officer, Research Affiliates

View Profile for Chris Brightman

Jing Yang

Portfolio Manager

View Profile for Jing Yang

Bryan Tsu

Portfolio Manager

View Profile for Bryan Tsu

Yields & Distributions

Historical Prices & Distributions

Distribution Yield (At Nav) 1 as of 09/30/2023 1.08%
1 - Day Distribution Yield as of 12/06/2023 -
30-Day SEC Yield2 as of 10/31/2023 5.90%
Latest Dividend Distribution ($ Share)3 as of 12/27/2022 $0.14659
Dividend Distribution (YTD) 4 as of 12/27/2022 $0.77095

disclosures

1The distribution yield for monthly paying Funds is calculated by annualizing actual dividends distributed for the monthly period ended on the date shown and dividing by the net asset value on the last business day for the same period. The distribution yield for quarterly paying Funds is calculated by taking the average of the prior four quarterly distribution yields. The quarterly distribution yields are calculated by annualizing actual dividends distributed for the quarterly period ended on the most recent quarterly distribution date and dividing by the net asset value for the same date. The distribution yield for annual paying Funds is calculated by taking the annual distribution divided by the Fund’s net asset value on ex-date. The yield is annualized if the Fund incepted less than a year ago. The yield does not include long- or short-term capital gains distributions.
2The Subsidized yield includes contractual expense reimbursements and it would be lower without those reimbursements. The Unsubsidized 30 Day SEC yield excludes contractual expense reimbursements. The 30 day SEC Yield is computed under an SEC standardized formula based on net income earned over the past 30 days.
3Data does not include special cash dividends.
4Data is based on distributions since the most recent calendar year end and does not include special cash dividends.

Fees & Expenses

Effective as of 07/31/2023
Gross Expense Ratio 2.05%
Maximum CDSC 1.00%
Adjusted Expense Ratio 1.94%
The Adjusted Expense Ratio 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.

Prices & Performance

Important Fund Event: Reverse Share Split

On March 25, 2022, the Fund performed a reverse share split. The reverse share split reduced the number of outstanding shares of each class of the Fund, and proportionately increased the net asset value (“NAV”) per share. The increased price per share will be reflected in the “Daily Change” value as of 3/28/2022. The NAV for 3/25/2022 reflects the pre-reverse share split NAV. For a helpful Q&A on the reverse share split, click here.

 

Daily Statistics

All data as of 12/06/2023

NAV $12.02 One Day Return -0.41%
Daily Change $-0.05 Daily YTD Return 7.32%

All data as of

All data as of

Click here to view the Price and Performance for all Mutual 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. The maximum offering price (MOP) returns take into account the contingent deferred sales charge (CDSC) for Class C shares, which for this fund is 1.00%. This charge may apply to shares redeemed during the first year of ownership.

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.

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.
The inception date provided is for the Fund’s oldest share class, the Institutional Class. The returns presented are for Class C shares, which were first offered in 2/14. Returns measure performance from the inception of the oldest share class to the present, so some returns predate the inception of Class C. Those returns are calculated by adjusting the Institutional returns to reflect the C shares' different charges and expenses. 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.

Monthly Morningstar Rating™ is for the share class shown; other classes may have different performance characteristics.


A rating is not a recommendation to buy, sell or hold a fund. © 2023 Morningstar, Inc. All Rights Reserved. The information contained herein: (1) is proprietary to Morningstar; (2) may not be copied or distributed; and (3) is not warranted to be accurate, complete or timely. Neither Morningstar nor its content providers are responsible for any damages or losses arising from any use of this information. The Morningstar RatingTM for funds, or "star rating", is calculated for managed products (including mutual funds, variable annuity and variable life subaccounts, exchange-traded funds, closed-end funds, and separate accounts) with at least a three-year history. Exchange-traded funds and open-ended mutual funds are considered a single population for comparative purposes. It is calculated based on a Morningstar Risk-Adjusted Return measure that accounts for variation in a managed product's monthly excess performance, placing more emphasis on downward variations and rewarding consistent performance. The top 10% of products in each product category receive 5 stars, the next 22.5% receive 4 stars, the next 35% receive 3 stars, the next 22.5% receive 2 stars, and the bottom 10% receive 1 star. The Overall Morningstar Rating for a managed product is derived from a weighted average of the performance figures associated with its three-, five-, and 10-year (if applicable) Morningstar Rating metrics. The weights are: 100% three-year rating for 36-59 months of total returns, 60% five-year rating/40% three-year rating for 60-119 months of total returns, and 50% 10-year rating/30% five-year rating/20% three-year rating for 120 or more months of total returns. While the 10-year overall star rating formula seems to give the most weight to the 10-year period, the most recent three-year period actually has the greatest impact because it is included in all three rating periods. Past performance is no guarantee of future results.

Some of Morningstar’s proprietary calculations, including the Morningstar Rating™, are not customarily calculated based on adjusted historical returns. However, for new share classes/ channels, Morningstar may calculate an extended performance Morningstar Rating that is based, in part, on adjusted historical (or “pre-inception”) returns for periods prior to the inception of the share class of the fund shown herein (“Report Share Class”).

The extended performance is calculated by creating a performance stream consisting of the Report Share Class and older share class(s). Morningstar adjusts the historical total returns of the older share class(es) of a fund to reflect higher expenses in the Report Share Class. We do not hypothetically adjust returns upwards for lower expenses. For more information regarding calculation of pre-inception returns, please see the Morningstar Extended Performance Methodology.

The extended performance Morningstar Risk-Adjusted Return is then calculated for three-, five-, and 10-year time periods and used to determine the extended performance Morningstar Rating. The extended performance Morningstar Rating for this fund does not affect the retail fund data published by Morningstar, as the bell curve distribution on which the ratings are based includes only funds with actual returns. The Overall Morningstar Rating for multi-share open-end funds will be either based on actual performance only or extended performance only. Once the share class turns three years old, the Overall Morningstar Rating will be based on actual ratings only. The Overall Morningstar Rating for multi-share variable annuities is based on a weighted average of any ratings that are available. For more information, please see the Morningstar Rating Methodology.

While the inclusion of pre-inception data, in the form of extended performance, can provide valuable insight into the probable long-term behavior of newer share classes of a fund, investors should be aware that an adjusted historical return can only provide an approximation of that behavior. For example, the fee structures of a retail share class will vary from that of an  institutional share class, as retail shares tend to have higher operating expenses and sales charges. These adjusted historical returns are not actual returns. The underlying investments in the share classes used to calculate the pre-performance string will likely vary from the underlying investments held in the fund after inception. Calculation methodologies utilized by Morningstar may differ from those applied by other entities, including the fund itself.
The monthly Lipper Average and Rankings are calculated by Lipper, Inc, based on the total return performance of funds included by Lipper in that category. Rankings begin with the inception of the actual share class. Lipper does not take into account sales charges.

Portfolio Composition

All data as of unless otherwise stated

Summary Characteristics - Index5

Stocks in Portfolio 1,435
P/E Ratio (Forward) 10.25
Weighted Median Market Cap ($US MM) 1,941.91
P/E Ratio (Trailing) 9.27
Weighted Avg Market Cap ($US MM) 2,220.40

Top 5 GICS Sector - Index
Market Value %6

Financials 26.03
Industrials 14.08
Energy 11.26
Real Estate 10.39
Consumer Discretionary 10.19

Risk Characteristics
(Trailing 3 Years)

Standard Deviation7 26.89
Sharpe Ratio8 0.61
Information Ratio9 0.79
Tracking Error10 8.12

Summary Characteristics - RAE5

Stocks in Portfolio 170
P/E Ratio (Forward) 10.46
Weighted Median Market Cap ($US MM) 2,959.05
P/E Ratio (Trailing) 10.08
Weighted Avg Market Cap ($US MM) 3,334.40

Top 5 GICS Sector - RAE Market Value %6

Consumer Discretionary 23.72
Industrials 16.31
Energy 15.79
Financials 8.62
Information Technology 8.12

Sector Allocation - Duration in Years

US Government Related11 -1.46
Securitized12 2.65
Invest. Grade Credit 0.11
High Yield Credit 0.00
Non-USD Developed -0.07
Emerging Markets13 0.11
Other14 0.00
Net Other Short Duration Instruments15 0.25

disclosures

5P/E Ratio, Weighted Average Market Cap. and Median Market Cap. are the averages of the P/E and market capitalization of the issues held by the portfolio. P/E is a ratio of security price to earnings per share. Typically, an undervalued security is characterized by a low P/E ratio, while an overvalued security is characterized by a high P/E ratio. Forward P/E is based on estimated future earnings as assembled and calculated by FactSet.
6RAE equity statistics are for the RAE Fundamental US Small model portfolio, which the Fund replicated via total return swaps. Cap equity statistics are for the Russell 2000® Index, the Fund's benchmark.
7Standard deviation is a measure of the dispersion of a set of data from its mean. The more spread apart the data, the higher the deviation.
8The Sharpe Ratio measures the risk-adjusted performance. The risk-free rate is subtracted from the rate of return for a portfolio and the result is divided by the standard deviation of the risk-free rate subtracted from the portfolio returns.
9The information ratio is defined as the portfolio's excess return per unit of risk, or tracking error. For example, an information ratio of 1 means that a portfolio manager generates 100 basis points, or one percent of excess return for every 100 basis points of risk taken.
10Tracking error, a measure of risk, is defined as the standard deviation of the portfolio's excess return vs. the benchmark expressed in percent.
11May include nominal and inflation-protected Treasuries, Treasury futures and options, agencies, FDIC-guaranteed and government-guaranteed corporate securities, and interest rate swaps.
12The Securitized bucket will include Agency MBS, non-Agency MBS, CMBS, ABS, CDO, CLO, and Pooled Funds.
13Emerging 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.
14May include municipals, convertibles, preferreds, and yankee bonds.
15Net 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.
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.
RAE equity statistics are for the RAE US Small model portfolio, which the Fund replicated via total return swaps.
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.
A word about risk:

In managing the strategy’s investments in Fixed Income Instruments, PIMCO utilizes an absolute return approach; the absolute return approach does not apply to the equity index replicating component of the strategy. Absolute return portfolios may not fully participate in strong positive market rallies. Investing in securities of smaller companies tends to be more volatile and less liquid than investing in securities of larger companies. 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. 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. 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. 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. Diversification does not ensure against loss.
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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CMR2022-0209-2031944-T