PIMCO Low Volatility RAFI-PLUS AR Fund INSTL (PILVX)

Please note that effective on or about 15 April 2015, the fund’s name will change to PIMCO RAE Low Volatility PLUS Fund

Objective
Seeks total return which exceeds that of the S&P 500 Index
Primary Portfolio
An equity strategy that use low volatility equity index derivatives backed by an actively managed portfolio of fixed income securities with an absolute return orientation.
At a Glance
SymbolPILVX
CUSIP Number 72201U331
Total Fund Assets (in millions) $1,286.3
Share Class Inception Date 12/30/2013
Dividend Frequency Quarterly
Maximum Sales Charge -
Net Operating Expenses 0.79 %

Daily Price

NAV Day Return
$10.89 $0.14 1.30%
YTD Return
0.00%
As of 03/30/15

Historical Prices

03/25/15

$10.76

03/26/15

$10.74

03/27/15

$10.75

Performance quoted represents past performance and 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 average annual returns shown. Performance quoted does not reflect any sales charges, if applicable, and performance would be lower if it did. Click Performance tab for performance current to the most recent month-end.
Fund Overview
An innovative approach, combining defensive equity exposure and outperformance potential

The fund provides exposure to a low volatility version of the Research Affiliates Fundamental Index (RAFI) by investing a small portion of its assets in index-linked derivatives. The majority of fund assets are invested in an actively managed fixed income portfolio. Through this structure, the fund harnesses multiple independent performance sources as part of its integrated investment process.


Why invest in this fund
Outperformance and downside risk reduction potential

Traditional index funds aim to match market performance by investing in the stocks in the index. This fund goes further, offering full equity exposure and an actively managed fixed income portfolio management in an effort to enhance returns and mitigate downside equity risk.


Fundamental index approach with a lower volatility and higher yield emphasis

Aiming to avoid a pitfall of market-cap indexing – overweighting overvalued and underweighting undervalued stocks – RAFI weights the companies in its universe using fundamentals-based factors. The RAFI version used in this fund is further optimized to provide the potential for downside risk protection and more stable performance by focusing on lower volatility and higher income companies.


Enhanced return potential

The fund invests a small portion of its assets in index-linked derivatives, providing full exposure to the low volatility version of RAFI. The majority of assets are then invested in an actively managed fixed income portfolio with an absolute return orientation. Absolute return portfolios may not necessarily fully participate in strong, positive market rallies.


Our Expertise
Time-tested management experience

PIMCO, one of the largest investment managers in the country, pioneered the StocksPLUS® strategy in 1986 to offer investors another attractive choice beyond traditional active and passive equity approaches. Today, PIMCO manages StocksPLUS portfolios across a range of objectives.

Managers

Robert Arnott

Mr. Arnott is the founder and chairman of Research Affiliates, a subadvisor to PIMCO. In 2002, he established Research Affiliates as a research-intensive asset management firm that focuses on innovative asset allocation and alternative indexation products. He previously served as chairman of First Quadrant, as president of TSA Capital Management (now part of Analytic Investors), and as vice president at The Boston Company. He also was global equity strategist at Salomon Brothers. He has published more than 100 articles in journals such as the Journal of Portfolio Management, the Harvard Business Review and the Financial Analysts Journal, where he also served as editor in chief from 2002 through 2006. He graduated summa cum laude from the University of California, Santa Barbara, in 1977 in economics, applied mathematics and computer science.

Sudi N. Mariappa

Mr. Mariappa is a managing director and generalist portfolio manager in the Newport Beach office. He rejoined PIMCO in 2014 from GLG, a London-based hedge fund, where he was a managing director, developing and managing fixed income funds. Previously at PIMCO, Mr. Mariappa was a managing director and head of global portfolio management. He also served as a senior advisor to PIMCO’s portfolio management group from 2009-2011. Prior to joining PIMCO in 2000, he was a managing director for Merrill Lynch in Tokyo, overseeing Japanese government bond and swap derivative trading. He has 27 years of investment experience and holds an MBA, as well as a bachelor's degree in chemical engineering, from Cornell University.

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.  Click here for a complete list of the PIMCO Funds prospectuses and summary prospectuses. 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 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. 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. 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. 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. Equities may decline in value due to both real and perceived general market, economic, and industry conditions. Leverage, including borrowing, may cause a portfolio to be more volatile than if the portfolio had not been leveraged. 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. 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.


Past performance is not a guarantee or a reliable indicator of future results. For funds with at least a 3-yr history, Morningstar calculates a Morningstar Rating based on a risk-adjusted return measure that accounts for variation in a fund’s monthly performance (including the effects of sales charges, loads and redemption fees) with an emphasis on downward variations and consistent performance. The top 10% of funds in each 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 is a weighted average of the performance figures for its 3-, 5- and 10-yr (if applicable) Morningstar Rating metrics. Morningstar, Inc.® 2015. All rights reserved. The information contained herein; (1) is proprietary to Morningstar and/or its affiliates; (2) may not be copied or distributed; (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. Past performance is no guarantee of future results. Hollow stars represent a class of shares with inception dates that is different than the inception date of the fund. For the period prior to the inception date of these shares, performance information is based on the performance of the fund’s Institutional Class shares, adjusted to reflect the actual distribution and/or service (12b-1) fees and other expenses paid by the newer share class.


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