Income Fund March Section 19(a) FAQs

Answers to questions about Income Fund March Section 19(a) notice

Income Fund Section 19

What is a Section 19(a) notice?

A Section 19(a) notice is required to be sent if a distribution payment is made from any  source  other than the Fund’s net investment income. The notice will break down estimated amounts of  each Fund's current distribution paid from net investment income, net realized capital gains, and paid-in surplus or other capital sources, commonly referred to as return of capital. The  PIMCO Income Fund again distributed approximately $.055500 per share for the Institutional Class  Shares (distribution varies by share class) for March 2020 but under-earned its distribution, so a small portion of the distribution was estimated as return of capital (1.33% of March’s  distribution in the institutional share class as an example). As a result, PIMCO had to issue a Section 19(a) notice to shareholders.

Below is the institutional share class table that was included in the Section 19(a) notice. The  notice contained separate tables per share class.

Institutional Shares (PIMIX)
  Current Distribution % Breakdown of the Current Distribution
Net Investment Income $0.054764 98.67%
Net Realized Capital Gains $0.000000 0.00%
Paid-in Surplus or Other Capital Sources $0.000736 1.33%
Total (per common share) $0.055500 100.00%

Average Annual Returns (%)

Ryder One chart 

30-Day SEC Yield as of 4/30/2020 is 4.00%.

As of 31 March 2020. Source: PIMCO. Performance displayed is for the Institutional Class Shares, net of fees. For a copy of the Summary Prospectus please click here.

Gross Expense Ratio: 1.05%
Adjusted Expense Ratio: 0.50%

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.

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 or call (888) 87-PIMCO.

Distributions may be comprised of ordinary income, net capital gains, and/or a return of capital  (“ROC”) of your investment in the Fund. If the Fund estimates that a portion of its  distribution may be comprised of amounts from sources other than net investment income in accordance with  its  policies and good accounting practices, the Fund will notify shareholders of the estimated  composition of such distribution through a Section 19 Notice. The amounts and composition  of  distributions reported on any Section 19 Notice issued by the Fund are only estimates and  should  not be used for tax reporting purposes. The actual amounts and composition of distributions  for  tax reporting purposes will depend upon the Fund's investment experience during its entire  fiscal year and may be subject to changes based on tax regulations. Final determination of a  distribution's tax character will be reported on Form 1099 DIV sent to shareholders for the  calendar year.

Are the amounts and sources of distribution final amounts that  should  be used  for  tax reporting  purposes?

No. The amounts and sources of distribution reported in this notice are only estimates and are not being provided for tax reporting purposes. The amounts reported have been determined using  general accounting methods, not tax accounting methods. Shareholders should not use the information provided in preparing their tax returns. The actual amounts and sources of the amounts reported for tax purposes will depend upon the Fund’s investment results for its entire fiscal year as determined under applicable tax law and regulations. Shareholders will receive a Form 1099-DIV for the calendar year indicating how to report Fund distributions for federal income tax purposes.

What are distributions from “Paid‑in Surplus or Other Capital  Sources”?

Distributions from “paid-in capital or other capital sources” represent amounts paid from the  Fund’s capital base. These are amounts distributed in excess of the Fund’s investment earnings  as determined under general accounting methods. Although commonly referred to as “return of  capital distributions”, these distributions are not equivalent to a tax return of capital  reported as nontaxable distributions on Form 1099-DIV. A tax return of capital results when a  fund distributes more than its taxable income as determined under tax accounting methods. The  Fund’s distributions in any period may be more or less than the net return earned by the Fund on  its investments, and therefore should not be used as a measure of performance or confused with  “yield” or “income.” For purposes of 19(a) related reporting, the sources of the dividend will  be determined at the fund level and allocated to each share class pro-rata. For example, the  same percentage of Paid-in Surplus or Other Capital Sources determined at the fund level will be  applied to each share class dividend rate to determine the amount of Paid-in Surplus or Other  Capital Sources for the respective share class.

When did shareholders begin receiving the Section 19(a) notice?

Shareholders began receiving notification on or about April 9, 2020.

What is Income Fund’s distribution philosophy?

The primary objective of the Income strategy is to maximize current income, but PIMCO does  not  want to take on excessive risk in order to generate this income stream. It has been  important  that the Fund not stretch for yield, and the most recent market downturn has underscored  this.  As we evaluate the distribution going forward, we will continue to evaluate what the  appropriate  level of sustainable income is. Our philosophy to balance income with capital preservation,  and  our ability to look around the world for the best income-producing opportunities will  remain  unchanged.

What is the history of Income Fund’s distribution?

The Fund has maintained a stable monthly distribution over its history; the current level has  been  stable since 2012.

Dividend Distribution Chart
NOTE: The Income distribution above does not include $0.082/share from 2010 and $0.092/share from 2011 in capital gains.
The Income Fund combined  distribution includes regular monthly distribution and additional year-end distribution.  Distributions are not guaranteed. Additional year-end distributions are made with excess  income accrued daily throughout the year.

As of 30 April 2020. Source: PIMCO.

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 or call (888) 87-PIMCO.

What is being reported in the Income Fund’s March 31, 2020 annual  shareholder  report?

In the March 31, 2020 annual shareholder reports, PIMCO will report the actual sources of  distribution for the Income Fund and Low Duration Income Fund, for each month covered in the  shareholder report. In early April, the Income Fund issued a Section 19(a) notice to its  shareholders. When calculating such notice, the regulation permits fund companies to use  reasonable estimates. The shareholder report disclosure provides information regarding the  actual sources of the distribution for that period. As would be expected, there are differences  between the estimates and the actual sources of the distribution which are described in  more  detail in the questions below. A Section 19(a) notice was not issued for the Low Duration  Income  Fund since at the time based on our estimate we did not believe there was Paid-in Surplus  or  Other Capital Sources as a component of those distributions, which is also reflected in  the  shareholder report that no portion of the distribution was Paid-in Surplus or Other  Capital  Sources.

What is the difference between the actual and estimated sources of  distribution for the Income Fund?

The March Paid-in Surplus or Other Capital Sources, commonly referred to as a return of  capital,  for the Income Fund Institutional share class increased from $0.000736 (1.33% of the total  distribution amount for March) as disclosed in the Section 19(a) notice to $0.0042 (7.56%)  on  the shareholder report disclosure. Please note the increase will vary based on share  class. 

The shareholder report will also show that in January and February the Income Fund had a  portion  of its distribution which included Paid-in Surplus or Other Capital Sources. The Income Fund  did  not issue Section 19(a) notices for those periods since at the time based on our estimate we  did  not believe there was Paid-in Surplus or Other Capital Sources as a component of those  distributions.

From a shareholder perspective, we believe it is important to note, that for the fiscal  year  ending March 31, 2020, the Income Fund will not report a return of capital for tax purposes. This is reflected in the shareholder report and will also  be  reflected in the tax reporting received by fund shareholders.

Are the actual sources of distribution shown in the shareholder report  used  for tax reporting purposes?

No, similar to the Section 19(a) notice, the information is not provided for U.S. federal  income  tax reporting purposes. The tax character of all dividends and distributions is officially  reported on Form 1099-DIV (for shareholders who receive U.S. federal tax reporting) at the  end  of each calendar year.

How will this be reported in the annual shareholder report?

The table below will be included in the annual shareholder report and will show the actual  sources of distribution for the prior six months. The below table is for the Income Fund  Institutional share class. There will be separate tables per share class.


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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 or by visiting Please read them carefully before you invest or send money.

The performance figures presented reflect the total return performance for the Institutional Class shares (after fees) and reflect changes in share price and reinvestment of dividend and capital gain distributions. All periods longer than one year are annualized. The minimum initial investment for Institutional, I-2, I-3 and Administrative class shares is $1 million; however, it may be modified for certain financial intermediaries who submit trades on behalf of eligible investors.

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.

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.

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 and/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.

Although the Fund may seek to maintain stable distributions, the Fund’s distribution rates may be affected by numerous factors, including but not limited to changes in realized and projected market returns, fluctuations in market interest rates, 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’s distribution rate or that the rate will be sustainable in the future.

For instance, during periods of low or declining interest rates, the Fund’s distributable income and dividend levels may decline for many reasons. For example, the Fund may have to deploy uninvested assets (whether from purchases of Fund shares, proceeds from matured, traded or called debt obligations or other sources) in new, lower yielding instruments. Additionally, payments from certain instruments that may be held by the Fund (such as variable and floating rate securities) may be negatively impacted by declining interest rates, which may also lead to a decline in the Fund’s distributable income and dividend levels.

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.

Funds typically offer different share classes, which are subject to different fees and expenses (which may affect performance), having different minimum investment requirements and are entitled to different services.

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