• Normally invests at least 80% of its net assets (plus any borrowings for investment purposes) in a diversified portfolio of floating rate debt instruments, a substantial portion of which will be senior floating rate loans.
• A substantial portion of the portfolio's holdings are in high-yield senior floating-rate loans, which generally hold the most senior position in the capital structure of a corporation, and are often secured with collateral. It may also hold common stock received from conversion of other portfolio securities. It may also hold common stock received from conversion of other portfolio securities.
• Because most of these debt instruments have variable interest rates, the Fund is generally expected to have less interest rate risk and a more stable net asset value than funds that invest in fixed-income securities, although the NAV will vary due to fluctuations in interest rates and other factors, such as changes in the credit quality of portfolio securities and the spread between corporate-debt interest rates and Treasuries.

The top-down investment process begins with PIMCO’s annual Secular Forum, during which the firm develops a three- to five-year outlook for the global economy and interest rates. This helps set the basic portfolio parameters, including duration, yield-curve positioning, sector weightings, credit quality breakdown and individual issue selection. The Fund focuses on securities in the upper tier of the below-investment grade credit spectrum, which historically have delivered the best risk/return profile. Consideration of yield is only one component of the portfolio manager’s approach; PIMCO also considers capital appreciation and principal preservation through intensive fundamental, macroeconomic, industry and company-specific research. Finally, non-traditional sectors are employed in small doses to enhance return and increase diversification.

Bill Gross, CFA, is a founder and Managing Director of PIMCO. He began his investment career in 1969 and is widely regarded as the world's foremost fixed income authority.

Newport Beach, California

Led by Founder and Co-Chief Investment Officer Bill Gross, PIMCO is widely recognized as one of the premier bond managers in the world. PIMCO applies this expertise to a range of core and specialized investment portfolios.