1. Income from the portfolio may be subject to state income taxes and the alternative minimum tax.

2. Source: Moody’s Investor Services [Moody’s Special Comment, Mapping of Moody’s US Municipal Bond Rating Scale to Moody’s Corporate Rating Scale and Assignment of Corporate Equivalent Ratings to Municipal Obligations, June 2006], Average cumulative default rates were compared over 10-year periods 1970-2005.

3. Source: Lehman Brothers, Standard & Poor’s. High yield municipal bonds and high yield corporate bonds represented by the Lehman Brothers High Yield Municipal Index and Lehman Brothers U.S. Corporate High Yield Index, respectively.

4. Diversification does not ensure a profit or eliminate the risks of investing.

5. Source: Lehman Brothers as of January 31, 2008.

* Assets in the core bond portion of the portfolio are generally invested in a combination of individual municipal securities. For California-preferenced products, these securities are anticipated, but not guaranteed, to be invested in municipal securities which are generally issued by or on behalf of California and its political subdivisions, financing authorities and their agencies. Depending on the characteristics, availability and attractiveness of California bonds in the core portion of the portfolio, Allianz Global Investors and PIMCO reserve the right to purchase bonds from other states as appropriate.

The PIMCO High Yield Municipal Bond-California Preferenced managed accounts have two distinct components. Allianz Global Investors Managed Accounts manages the portion of the portfolio that consists of individual securities, using a model portfolio developed by the sub-advisor, PIMCO, as a guide. While Allianz Global Investors Managed Accounts generally intends to follow PIMCO's model portfolio, as the investment manager it has the discretion to accept or reject any investment recommendation and to deviate from the model portfolio. The remainder of the portfolio is managed by PIMCO in the form of commingled vehicles.

All portfolio statistics represent a composite of fully discretionary portfolios of this strategy type currently managed by Allianz Global Investors Managed Accounts. Composite results may not include all accounts. Individual account holdings will vary depending on the size of an account, cash flows and account restrictions. These statistics are representative of how the portfolios in the composite are invested as of the indicated date. Portfolio holdings are subject to change daily. Under no circumstances does the information contained within represent a recommendation to buy or sell securities.

The Lehman Brothers High Yield Municipal Index is an unmanaged index represented by the Non-Investment-Grade Municipal Bond Index and composed of non-rated municipal bonds or municipal bonds rated Ba1 or below. There are also par value, transaction size, and maturity criteria for the index. The Lehman Brothers U.S. High-Yield Index covers the universe of fixed-rate, non-investment-grade debt. All bonds must be corporate, USD denominated and non-convertible. Securities must be rated speculative grade: Ba1/BB+/BB+ or lower. A small number of unrated bonds are included in the index; to be eligible they must have previously held a speculative rating or have been associated with a high-yield issuer, and must trade accordingly.

Investing in securities entails risks. PIMCO High Yield Municipal Bond-California Preferenced strategy intends to invest a substantial portion of its assets in high yield Municipal Bonds and “private activity” bonds that are rated (at the time of purchase) below investment grade. Lower rated bonds generally involve a greater risk to principal than higher rated bonds. In an environment where interest rates may trend upward, rising rates will negatively impact most bond funds, and fixed income securities held by a fund are likely to decrease in value.

Investors in the strategy will, at times, incur a tax liability, as income from these funds may be subject to state and local taxes. The portfolio may invest substantial assets in “private activity” bonds whose interest is a tax-preference item for purposes of the federal alternative minimum tax (“AMT”). For shareholders subject to the AMT, distributions derived from “private activity” bonds must be included in their AMT calculations, and as such a portion of the Fund’s distribution may be subject to federal income tax.

The Portfolio may invest in securities issued by entities, such as trusts, whose underlying assets are Municipal Bonds, including, without limitation, residual interest bonds. The Portfolio may, without limitation, seek to obtain market exposure to the securities in which it primarily invests by entering into a series of purchase and sale contracts or by using other investment techniques (such as buy backs or dollar rolls).

The guarantees on U.S. Government Obligations are to the timely repayment of interest and principal. Portfolios which invest in them are not guaranteed. Mortgage-backed securities are subject to prepayment risk. The value of some mortgage-related or asset-backed securities may be particularly sensitive to interest rate changes, and there is no assurance that private of the underlying mortgages or assets will meet their obligations.

The Portfolio may invest in derivative instruments and certain transactions which may give rise to a form of leverage. The use of leverage may cause the portfolio to liquidate portfolio positions to satisfy its obligations or to meet segregation requirements when it may not be advantageous to do so. Leverage, including borrowing, may create the potential for greater gains during favorable market conditions and the risk of magnified losses during adverse market conditions. Use of derivative instruments may involve certain costs and risks such as liquidity risk, interest rate risk, market risk, credit risk, management risk and the risk that a fund could not close out a position when it would be most advantageous to do so. Portfolios investing in derivatives could lose more than the principal amount invested in those instruments.

The managed account strategies described in this material are offered by Allianz Global Investors Managed Accounts and are available exclusively through financial professionals. Managed accounts have a minimum asset level and may not be suitable for all investors. For more information about this product, contact your financial advisor. Financial professionals seeking more information should contact their managed accounts department or call their Allianz Global Investors representative. Allianz Global Investors Managed Accounts LLC, 1345 Avenue of the Americas, New York, NY 10105-4800. Investment Products: NOT FDIC INSURED / MAY LOSE VALUE / NOT BANK GUARANTEED