A word about risk:  The fund will seek exposure to commodities through commodity-linked derivatives and through a wholly-owned subsidiary of the Fund organized under the laws of the Cayman Islands (the “Subsidiary”). The Subsidiary is advised by PIMCO, and has the same investment objective as the Fund. The Subsidiary (unlike the Fund) may invest without limitation in commodity-linked swap agreements and other commodity-linked derivative instruments. The fund attempts to gain exposures that may vary inversely with the performance of the fund’s benchmark (Dow Jones-UBS Commodity Index Total Return) on a daily basis, such that the fund will generally benefit when the benchmark is declining in value and will generally not perform well when the benchmark is rising, a result that is different from traditional mutual funds. However, the fund is not designed or expected to produce returns which replicate the inverse of the performance of the benchmark, and the degree of variation could be substantial, particularly over longer periods. This is due to factors relating to inverse correlation and compounding risk, including the effects of compounding on the performance of the fund’s derivatives short positions for periods greater than one day, as well as the results of PIMCO’s active management of the fund (including income and gains or losses from fixed income instruments and variations in the fund’s level of short exposure), the impact of fund fees and expenses, and the fact that derivatives positions in general may not correlate exactly with the benchmark. It is possible for the fund to experience a negative return when the benchmark is declining and vice versa.

Entering into short sales includes the potential for loss of more money than the actual cost of the investment, and the risk that the third party to the short sale may fail to honor its contract terms, causing a loss to the portfolio. 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. Inflation-linked bonds (ILBs) issued by a government are fixed-income securities whose principal value is periodically adjusted according to the rate of inflation; ILBs decline in value when real interest rates rise. Treasury Inflation-Protected Securities (TIPS) are ILBs issued by the U.S. Government. 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. Derivatives and commodity-linked 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. Commodity-linked derivative instruments may involve additional costs and risks such as changes in commodity index volatility or factors affecting a particular industry or commodity, such as drought, floods, weather, livestock disease, embargoes, tariffs and international economic, political and regulatory developments. Investing in derivatives could lose more than the amount invested. The Fund is nondiversified, which means that it may concentrate its assets in a smaller number of issuers than a diversified fund.

The value of most bond funds and fixed income securities are impacted by changes in interest rates. Bonds and bond funds with longer durations tend to be more sensitive and more volatile than securities with shorter durations; bond prices generally fall as interest rates rise.